Can You Resign and Rejoin the Same Company to Access Your PF and Pension Funds?

Dear Senior Experts,

1. What are the circumstances for an employee to resign from the service and re-join the same company immediately to withdraw the PF amount and Pension Fund in full?

2. Is there any time gap limit between resigning (last day of working) and re-joining the same company?

3. For example, if the last working day is 31-10-2013, can he/she receive an offer letter immediately for 01-11-2013? If so, please explain.

Notes:

a) All processes should be legal and should not create any problems for both the company and the employee.

b) Keep in mind that the PF amount withdrawal application should be submitted after 60 days from the last day of leaving the current service.

c) Re-joining means: receiving a new offer letter, new documents, a new employee ID, a new PF account number, etc., as if a new fresher candidate.

Regards,
Kumar

In construction industries, temporary workers are given F&F Settlement, and after a 3-day gap, they will be engaged in another project (which may or may not be at the same location). In that case, the PF number remains the same.

Except for death and retirement cases, there is a waiting period to withdraw the PF. An employee must wait for 2 months before applying for PF withdrawal. For example, if a person leaves the service in September, they can only apply for their EPF & EPS in December. If the PF department promptly forwards the application to RPFO without delay, the money can be received by the end of January. In the same establishment, one cannot have two different PF numbers. Therefore, after withdrawing the accumulation, only then can the employee rejoin the company, as the existing number becomes void, and a new number can be allotted.

Handling Retrenched Employees

If a retrenched employee approaches the Labour Court to add previous service at the time of accepting a second F&F Settlement for benefits like Retrenchment Compensation, Gratuity, etc., how do you plan to tackle the situation?

You can rehire the employee after a 3-month gap, allowing them to withdraw their PF. Before assigning duties, obtain an application stating the reason for leaving the previous job and the resolution of any issues. The employee can confirm not claiming additional benefits and agree to be treated as a new candidate to the company.

Rejoining Process Example

If a person leaves the company on October 31, 2013, they can submit their PF Claim by the end of December. You can then submit the PF Claim form in January 2014 at the RPF Office. The money will be received by the first week of February 2014. The person can be engaged on February 1, 2014, with a new offer letter, new documents, a new employee ID, and a new PF A/C Number, as if they were a new fresher candidate.

I hope your query has been resolved. If you have any further doubts, please do not hesitate to ask. Our team members will guide you accordingly.

Regards

Dear Sir, Thank you for your kind and valuable reply. If the resigned employee clears all F&F settlements immediately when resigning, does he/she still need to wait for 3 months to rejoin as a new employee? My main concern is that this case should not create any problems for the employer and employee in the future, particularly regarding PF settlements.

Thanks & Regards,
Kumar

Here, the first question is why the employee wants to rejoin immediately after settling his/her FnF. If his/her motive was to withdraw the EPF Fund, then the left member must be unemployed for 60 days from the date of leaving; only then can he/she withdraw the EPF Fund. Before those 60 days, if he/she joined anywhere else or in the same organization, then he/she can't withdraw the EPF Fund, as per the Act.

Rejoining the Same Organization

Whereas, if that employee wants to rejoin the same organization again, then there is no need to wait for 3 months. He/She can join even after a 1-2 day gap after submitting a proper job application. However, he/she can't withdraw the EPF Fund, and this will also not create any problem in the future for PF settlement.

Understanding EPF Withdrawal Rules After a Job Switch

Almost everyone thinks that withdrawing your EPF amount after a job switch is totally fine and allowed; however, as per the law, it's illegal. You can only withdraw your EPF money if you have no job at the time of withdrawing EPF and if 2 months have passed. Only transfer is allowed in case you get a new job and you switch to it. While there are no cases where the EPF office tracks these things and takes up this matter, still, just for your information, you should know that if you get a new job and then apply for withdrawal, it's illegal as per the law.

If at any given point during an audit, it is ascertained that the employee has resigned only to withdraw money from the PF, such an act is liable for penalization/punishment in the court of law for both the employee and employer, so it is not advisable.

Dear Bhuwan,

Employee Financial Challenges and PF Withdrawal

1. An employee is experiencing financial problems and needs to overcome them.
2. However, no one is adhering to the rule of remaining unemployed for 60 days from the date of leaving. 99% of the resigned employees who received immediate offers from other companies withdrew their PF amount.
3. The main concern here is to receive the PF amount and still remain with the same company as a new employee.

Regards,
Kumar

Dear Kumar,

Even if you settle the F&F benefits for the outgoing employee, the employee must be unemployed at the time of EPF and EPS withdrawal. That's the reason I told you that you can keep the Form 10C & 19 ready for submission, and on the first or second working day in January 2014, you can hand over the same to the RPF Office directly with a request to clear the same without any delay as the person is in a crisis. If you maintain a good relationship with PF authorities, then surely the person will get the claim settled within a 20 to 30-day span.

That's the reason I mentioned in my previous post that the person can be engaged again from 01 Feb 2014.

If your organization needs his service inevitably, then you can ask him to come for duty, and the payment may be fixed on a consolidated basis, and the payment may be made on vouchers. This voucher payment will not be considered as continuing service for PF, Bonus, and any other benefits. Here you have the responsibility to explain to the employee regarding all the issues that arise from this resignation/retrenchment and reinstating the employee back. He or his legal heir should not claim Gratuity or any other final benefits for the lapsed period and the break period for which you can take an undertaking from him on a Rs. 100/- stamp paper.

Regards,

I totally agree with you that 99% of workers don't follow these rules. However, as HR personnel, it is our duty to explain the right thing to them! Furthermore, this should be done based on their willingness to comply.

Moreover, as you mentioned that the employee is facing financial problems, he could consider taking a loan from the company. If your organization requires his services indispensably, then the management should also empathize with his situation and approve the loan.

Given that he is a long-standing employee and believes that withdrawing funds can alleviate his financial crisis, if he has been a member of the EPF Fund for over 7 years, he may also be eligible to take an advance from EPFO by providing a valid reason.

This approach could help him navigate through the financial crisis effectively.

Thank you.

From your post, I understand that you have some money issues and because of that, you want to withdraw the PF amount. I want to make some points here which might help you:

1. If you have money issues, you can partially withdraw your PF even if you are employed with the company; there is no need for resignation.

2. As you mentioned, you will be re-joining the same company immediately; in that case, the company will not allow you to withdraw the PF amount because there should be a waiting period of 2 months. Since you will be rejoining the same company, that means your company is aware that you are in employment for those 2 months. Even if the company allows it, there are chances of getting caught in PF audits, which can attract penalties for both the employee and the company.

3. If you are resigning from the company only to withdraw PF, it is not a good decision. The company's HR should not allow this.

4. If money is the only problem, there are other alternatives you can use, such as asking for salary in advance, encashing some leaves if possible, or taking a loan from the company.

I hope the above points will be useful.

HR's Role in Guiding PF Withdrawal

I could not understand how an HR personnel guide the employee to withdraw PF while they require the employee to serve them also. At most, the employee will get 1 month's salary against 1 year of PF withdrawal. Can't the HR convince the management instead and help the employee in getting a salary advance or staff loan instead of advising the employee to withdraw PF?

If the HR helps/guides employees the right way, it will be beneficial to the employer too. The productivity of the employee will be higher if they receive a little help with their personal life.

Regards

Very important information attached. Always remember, to receive your full PF amount, you need to be a member for a minimum of 10 years. Please go through the attached file.

Best regards,
Sohail

Request for PF Act Clarification

Can you please share the section or paragraph of the PF Act or rules that addresses this situation? Where is it mentioned?

My question is, an employee named X resigned, and we cleared all his dues on the same day. After 15 days, we realized that he is our assistant, and we decided to rehire him. Now, what happens in this case? Can we issue a new PF number, or should we consider him under the old number?

I request all of you to please share the sections or paragraphs in the PF Act or rules regarding this case. Additionally, share the paragraph where it is written that a 60-day waiting period is required for transferring or withdrawing the PF amount.

Regards,
Ajay Sharma

Dear Ajay, If an employee rejoins the same organization after 15 days of resigning, then a new PF number cannot be allotted to such an employee. The old PF account of that employee will be used for the purpose of PF contribution submission.

Secondly, for transferring the old PF fund to a new PF account, one need not wait for a 60-day period. It can be transferred at any time after joining somewhere else. The interest in such cases will be accumulated for up to 3 years of non-active status.

Declaration Clause for Non-Employment

"In the case of submission of an application for settlement under clause (s) of sub-paragraph (i) and in clause (b) of sub-paragraph (2) of paragraph 69 of the EPF Scheme, 1952, the claim should be submitted after two months from the date of leaving service provided the member continues to remain unemployed in an establishment to which the Act applies." A snapshot of the declaration on Form-19 is also attached, please see.

I hope this clarifies your doubts. Cheers.

Hi Guys,

Need urgent help! I was employed with company A for 1.5 years, and I did not withdraw/transfer my EPF amount. Then I worked with company B for one year. This time, I withdrew my EPF. Later, I joined back in company A (currently working here), and now they have opened a new EPF account for me. So now, I have 2 EPF accounts with the same company.

Is there a way that I can withdraw my previous EPF? Or can I transfer funds from my old EPF to the new one?

Thanks, Gaurav

Hi,

Joining the same company twice can sometimes lead to issues with PF transfer and settlement. If you left the job once and your PF was transferred to another company, rejoining the first company might create a problem if a new PF account was not generated. This can result in errors when trying to claim your settlement.

To proceed with your PF claim, you may need to provide certain documents. It would be helpful to know what documents are required to process your claim efficiently.

Additionally, a company letter might be necessary to support your claim and clarify any discrepancies in your PF details due to rejoining the same company.

Please ensure you have all the necessary paperwork in order to facilitate the settlement process smoothly.

Thank you.

But sir, I rejoined the company EMDATALY, but a new member ID was not created, and the PF account was closed for the previous member ID. What should I do?

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I recommend reaching out to the HR department or the relevant team in the company to address this issue promptly. They should be able to assist you in setting up a new member ID and resolving the PF account closure for your previous ID. It's essential to ensure that all your employment details are up-to-date and accurate to avoid any further complications.