PF Wage Ceiling - Employee Contributions

Dear Senior HRs'
Is it possible to restrict the employer contribution to the maximum wage ceiling of Rs.6500/- for employees who have contributed to the actual basic wages over and above Rs.6500/- since now (for the past 2 years)
Now whether we can restrict wage ceiling to the maximum of Rs.6500/- as per existing wage ceiling norms.
Pls clarify
Regards
Prabhu R

Dear Prabhu,
Yes there is a provision in the EPF Act to restrict wage ceiling to the maximum of Rs.6500/- and accordingly deduct contribution from the employee as well as employers side.
Regards,
Janardan

Request to Seniors,
My doubt is that, when an employee appointed with a condition of 12 % contribution on Basic & DA towards PF, and he is drawing more than Rs. 6500/- (Basic & DA) can we restrict the PF contribution only for Rs. 6500/- with out giving a notice to the employee ?
Is it will effect as breach of service contract or terms and conditions of appointment.
Kindly give your opinion.
Regards,
Mohan Kumar

Dear Mohan,

As per PF Act , if an employee is drawing a salary of Rs 6500/ (basic & da) per month, the employer is bound to pay and deposit PF contribution in accordance with applicable rate.

Whereas another employee of the same organisation is drawing a sum of Rs 20,000/ (basic & da) per month according to terms and conditions of his employment and the terms of employment stipulate that his PF contribution will be deducted on Rs 20,000/(basic & da) due to which the employer is depositing PF contribution on Rs 20,000/(basic & da), in that event the employer can not restrict the deduction of PF contribution to Rs 6500/ pm in place of Rs 20000/ pm arbitrarily. This act on the part of employer will be treated in violation of terms of employment.

However if the said employee expresses his desire in writing to the employer to the effect that he is willing to deduct PF contribution on Rs 6,500/ pm in stead of Rs 20,000/ pm with a view to increasing his net home take, then he can opt for the same in terms of recent circular issued by EPFO.

Regards,

Sibabrata Majumdar

Management Consultant Legal & HR

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Dear all,
The employer can not reduce the contribution directly or indirectly. Once you started complying beyond restricted limits, you can not reduce it to ceiling limits. However, such restrictions can be applied in case of new joiners / contributors.
P K Sharma

Hi,
As per latest amendment Employer can not reduce wages as per Provident fund act.
No employer in relation to an establishment to which any Scheme or the Insurance Scheme applies shall, by reason only of his
liability
for the payment of any contribution to the Fund or the Insurance
Fund or any charges under this Act or the Scheme or the Insurance
Scheme reduce whether directly or indirectly, the wages of any employee to whom the Scheme or the Insurance Scheme applies or
the
total quantum of benefits in the nature of old age pension,
gratuity, provident fund or life insurance to which the employee is entitled
under the terms of his employment, express or implied.

Dear Professional
Your question is right. Whenever amendment from Govt it the duty of employer should give awareness to the employees in the notice board and simultaneously the employer should frame the format of reducing the pf deduction and get signed from the employees for future and if any legalities formed by any 1 person we have a hold in the hands of employer.
Also better to get always employee consent whatever frequent changes in the HR scenario as they are all back bone of the organisation.
We have to give it in writing in the letter head to the PF saying the employees have been accepted the ceiling limit failing which will have to face the consequences.
Also we heard that the limit is going to revise from 6500 to 15000/- Pl wait and update accordingly
Hope this suffice your requirement
regards
Vijayalakshmi J
Manager - Trg

Dear all
Pl suggest me am about Profession Tax slab in Maharashtra from 2014
I have working now old slab mean above Rs 5000 to 10000 Rs 175 & Above 10001 Rs 200

Dear sir
I have some employee above Rs 6500 Basic +DA,
I want paid about above Rs 6500 Basic +DA pl suggest me for the PF Wages above Rs 6500.00 formalities for submitting to EPFO

Dear sir
I have some employee above Rs 6500 Basic +DA, as per Minimum wages act in Maharashtra
I want paid about above Rs 6500 Basic +DA pl suggest me for the PF Wages above Rs 6500.00 formalities for submitting to EPFO