Understanding PF Applicability: Do We Count Employees from Both Offices Together?

Our company has offices in Pune & Delhi. In Pune's office, there are 6 employees, and in Delhi's office, there are 4 employees. PF is applicable for establishments where the number of employees is more than 20. My question is, in the case of my company, do Delhi + Pune employees together have to be 20 for PF applicability, or does the Delhi office need to have 20 employees and Pune's office must have 20 employees for PF to be applicable?

Kindly reply and help clarify my doubt as I am a fresher and the only HR personnel looking after both offices. Your reply will be most helpful and valuable to me.

Thanks in advance.

PF is applicable if any establishment has employed 20 or more employees irrespective of their job location.

Regards,
Anil Mishra
Manager - HR & Administration
Rishiroop Group of Companies

Though the PF Act is applicable for companies with more than 20 employees, irrespective of location, your employee may opt for voluntary PF registration if required.

Thank you for the reply. I have one doubt: while considering 20 employees, do I need to consider the Delhi employee and the Pune employee together as 20, or individually as 20?

Thank you.

Considering Employee Count for PF Applicability

When considering the total number of employees for PF applicability, you need to consider all employees together. In your case, this means you should count both the employees from the Delhi and Pune offices together.

There is no simple answer to your problem. While the safe option is to club the two, as has been suggested, there are certain guiding principles regarding the assessment of whether two units separated by thousands of kilometers could be counted as one or not. The core principle is that the factual position has to be considered on the basis of the following factors:

1. Is it the same set of officials controlling and guiding both units? If so, clubbing is to be done.

2. Is one unit the Head Office/Marketing Office and the other a branch office controlled by the Head Office? If so, clubbing is to be done.

3. Are the activities in both units the same, or does one contribute to the other, or are they interrelated as far as production activity is concerned? If they are related, clubbing is to be done.

4. Are the books of account, profit-loss statement, and capital common? If so, clubbing is to be done.

5. Is the staff transferable from one unit to another? The fact that you are looking after HR in both units is a vital factor for clubbing.

There could be more factors to show the interrelationship of the units, and it needs a thorough analysis.

Regards,
KK