Can Employees Opt Out of EPF Deductions if Their Salary is Below Rs. 15,000?

Dear Professionals, Please let me know if an employee whose basic salary is less than Rs. 15,000 per month does not want EPF deducted from their salary, meaning they do not wish to save money through EPF. Can the employer provide them an exemption by taking a declaration from the employee in question?

Thanks,
Dhananjay.

According to Para 2 Clause (f), "Excluded Employee" means an employee who, having been a member of the Fund, withdrew the full amount of his accumulations in the Fund or an employee whose pay, at the time he is otherwise entitled to become a member of the Fund, exceeds [Fifteen Thousand rupees] per month. In your case, he should be a member, not have the exemption.

If more than 15,000 employees join the company freshly, they will have the exemption. If they were earlier members of the PF fund, then no exemption will be provided, regardless of whether the basic salary is more or less than the specified amount.

The question is for those whose basic salary is less than Rs. 15,000 but they don't want to have the money deducted from their salary. Can they be given an exemption by the employer if they provide a declaration?

Regards,
Aditya

An employer does not have discretionary powers to exclude any employees who are otherwise covered by the Act on a selective basis or en masse for any reason whatsoever. On the contrary, the employer can only include those who are not covered by the Act at their discretion. Additionally, the employer can contribute both the employees' and employer's contributions if the employee is not willing to contribute (as in the query) if they don't mind it.

Regards

It is not an optional scheme based on a declaration or undertaking given by the employee. If a person is earning less than Rs. 15,000 per month as BASIC + DA, they should be a member of the scheme.

Regards,
P. K. Sharma

Thank you to all of you, especially to Mr. P. K. Sharma, who understood my point exactly. In a nutshell, the employer is bound to create an EPF account for all employees covered by the Act.

Thanks again.

Regards,
Dhananjay.

The correct position as per the law is that an employee can submit Form 11 and opt out of the PF scheme. The rider here is that they should not have been a member of the scheme at any time. Accordingly, a new employee starting their career can submit this form and choose not to participate in PF. For all others, it is compulsory by law to enroll in the PF scheme if their earnings from Basic & D.A or Spl Allowance are less than 15,000.