Confused About PF Rules for Companies and New Joinees? Let's Clarify Together

Dear Sir, I just want some clarification on PF rules and applicability.

PF Rules for Companies with More Than 20 Employees

1. A company with more than 20 employees must compulsorily obtain a PF number. However, if an employee's basic salary is more than ₹8,100, is it mandatory for the company to contribute to PF in this case, or is it at the company's discretion not to pay PF?

PF Rules for New Joinees

2. If an employee who is a new joinee had PF deducted with his previous employer, what are the rules when joining a new company if the new company does not contribute to PF? Please advise.

Regards,
Nakul

Existing PF Member Salary Limit

In the case of an already existing PF member, even if he exceeds the salary limit of Rs. 6500/-, you must continue his membership by restricting his salary for PF purposes to Rs. 6500 (Compulsory).

New Employee PF Membership

For a new employee who is a PF member and has joined your organization, you are required to follow the same procedure (Compulsory). If the employee's salary exceeds Rs. 6500 and he insists on not having PF deductions, you must still continue his PF membership.

1) If an employee has Basic + DA greater than 6500, PF deduction is not mandatory. However, if the employee was a PF member in the past (same company) and now the Basic + DA is 6500+, in that case, PF deduction is compulsory.

2) If an employee is a new joiner and was a PF member in a past company, and he/she has withdrawn the PF balance and does not want to deduct PF (if Basic + DA = 6500+), in that situation, you may ask them to fill Form 11 (self-declaration form).

Seniors, please correct me if I am wrong.

EPFO Contributions and Salary Ceiling Update

Please make contributions to EPFO for all members as if their salary is ₹6,500/-. It is voluntary on the part of the employer to make contributions above ₹6,500/- in salary, but the same is not mandatory.

Now, as per earlier reports that appeared in newspapers and also as per the announcement made by the Minister of State in the Union Labour Ministry, the PF salary ceiling is being raised from ₹6,500/- to ₹15,000/-, effective from 01/04/14. For new employees as well, you have to cover them with PF.

Thanks,
R K Nair

Sir, the change in PF regarding salary ceiling, i.e., from 6500 to 1500, is effective from either 01 September 2014 or 01 April 2014? Please, can someone advise?

D. N. Shetty