Navigating PF and ESI: Do We Need a Medical Policy for Salaries Above ₹15,000?

Employee Benefits and Compliance Inquiry

Our startup IT company currently has 21 employees working in Delhi, and very soon, we will be opening another branch in Chennai. All employees have a salary of more than ₹15,000. We have started deducting PF from all employees but not ESI.

ESI and Medical Policy Requirement

My question is, if ESI is not mandatory for salaries above ₹15,000, do we still need to provide a medical policy for all employees?

Handling PF Deductions

Some employees do not want their PF deductions, so what should I do? Should I use Form-13 or another method?

Kindly advise, as I do not have experience in a Generalist profile; I have only worked in recruitment, and I am the only person handling this here.

Regards,
Priya

Dear Priya,

You should collect Form 11 for PF exemption for employees.

Regards.

Dear Priya,

You need to collect PF Form No. 11 for PF exemption. Please find the attached Form 11.

Regards,
Sampath

As far as ESI is concerned, if the gross salary is above ₹15,000, the ESI is exempted. However, for PF, even though the gross salary is above ₹15,000, if Basic & DA is less than ₹6,500, then PF is mandatory. If Basic + DA is above ₹6,500, and you are planning to start PF newly, then those employees shall be exempted. If, by any chance, they already have PF and due to an increment or promotion, their basic salary increases above ₹6,500, then the contribution is mandatory and is limited to ₹6,500.

Form 11 Declaration

Form 11 is a declaration form where you should maintain records for all employees who are receiving a basic salary above ₹6,500.

Your organization is applicable for ESI and PF registration. Whether all your staff are receiving salaries above the ESI and PF coverage thresholds, you are required to complete the registration process. Following that, you may contribute Rs. 7/- to the PF account and nil to the ESI account.

Regards,
Kashyap
Dharamveer Associates