Providend Fund - Provident Fund [Thread 502979]

I am the owner of a Small Manufacturing Unit. PROVIDENT FUND has been levied for the past 15 years. Earlier, I had a workforce of 15 laborers, including office staff. However, due to the recession and intense competition, along with some advancements in production, my workforce has now reduced to 7-8 laborers, including office staff, for the past 6-7 years.

Considering the inflation and higher standard of living, the laborers are now very reluctant to accept the deduction of P.F. and are arguing for the abolition of P.F. from the organization. Can you please guide me on this matter and help me terminate the P.F. from my organization?

Chirag,

Once the PF Act is applicable to your company, even if your workforce decreases below the threshold for applicability, you are still required to pay PF contributions; you cannot abolish it.

Arun J.

And what if I have a newly recruited staff with a salary above Rs. 10,000/- and they are demanding to avoid the option of P.F. since their pay is above Rs. 6,500/-? As per the law, it is provided that if the Basic + DA exceeds Rs. 6,500/-, then P.F. is applicable only after mutual consent of both the employer and the employee.

Dear Chirag,

I agree with the comments provided by Arun J. Please note that you should only apply for the cancellation of PF registration with the PF Authorities if the company is completely shut down. However, you can avoid paying PF contributions for new employees joining now with a salary exceeding Rs 6,500 (Basic, DA, and Retention Allowance) per month.

Regards,

Dear Chirag,

I am in agreement with the comments given by Arun J. Please note that you will only apply for cancellation of PF registration before the PF Authorities if the company is fully closed down. However, you may avoid paying PF contribution for a new employee joining now at a salary exceeding Rs 6,500/ (Basic, DA, and Retention Allowance) per month.

Regards,

Even this could be avoided only for the next one month or so by which time the amendment under issue of notification enhancing from 6500 to 15000/- would be brought to effect either in Sept. or Oct. '14.

Dear all,

I agree with the submission of Mr. Majumdar, but don't forget to obtain a declaration in Form 11 that the new joiner was never a member of the EPF anywhere else. Also, please keep in mind the ongoing amendment of the ceiling limit, which is expected at Rs. 15,000, and you will not be able to decrease/restructure wages into allowances for reducing the EPF liability.

P. K. Sharma