Are Rehired Employees with Higher Salaries Still PF Members? Seeking Clarity on EPF Rules

We are engaged in the business of garment export in Gurgaon (Haryana) and are also covered under the EPF Act of 1952. Some of our employees have resigned from their services and withdrawn their PF amount. After some time, they have rejoined the services with a higher salary, i.e., above the PF ceiling limit (₹6,500), and are treated as excluded employees. During the course of inspection, PF authorities insist on contributions from the said excluded employees. I seek your opinion on whether they are PF members or not.

Since they have already withdrawn the PF accumulations and closed the accounts, they are not existing members of the Provident Fund. Therefore, if they join a new company or the same company where they were previously employed, they should be treated as new employees. If their salary (considering PF qualifying components like Basic and DA) exceeds Rs 6,500, they can be treated as excluded employees. You may write to the PF Enforcement Officer who, I believe, has verbally ordered you to include them, despite them having already withdrawn their PF accumulations and no longer being PF members upon rejoining.

Clarification on Previous Employment and PF Membership

In this regard, one more clarification is required. If they were employed for more than 10 years in your company during their previous service period, then the situation would be different. If so, they would have withdrawn the Provident Fund only, and for the Pension Fund, they would have received a Scheme Certificate. This certificate is expected to be surrendered when they join another company (or return to the same company). Upon rejoining now, they are expected to be covered by PF regardless of their salary.

Regards,
Madhu.T.K

You should also fill out Form No. 11 for all excluded employees, which will be used during inspections.

Regards,
Vikram Trivedi
PF ESIC Consultant
[Phone Number Removed For Privacy Reasons]