Navigating Provident Fund Rules: Salary Changes, Employee Count, and Contractor Coverage

Hi, please solve the following problems:

Employee Salary and Provident Fund Membership

What if an employee, while joining an establishment, has a basic salary of Rs 4200, and after some period of time, his basic salary increases above Rs 6501/-? Does he have the option to terminate his membership from the Provident Fund Act?

Applicability of the Act Based on Employee Count

In case, after registering the establishment, at any point in time, the number of employees working in it becomes less than 20, will the Act still apply?

Contractor Employees and Scheme Coverage

Are the persons employed by or through a contractor covered under the Scheme?

Thank you.

Those employees registered with EPF have to continue in PF even if their salary exceeds the ceiling limit, or the number of employees falls below 20, etc. If the principal employer is registered with PF, employees under contract also have to be registered.

Regards,
Abbas.P.S

Answers to your questions are as follows:

Provident Fund Membership and Salary Increase

Once an employee becomes a member of the Provident Fund (PF), he remains a member even if his salary exceeds the threshold limit.

Applicability of the Act with Reduced Employee Count

Once the Act applies to an establishment, it remains applicable even if the number of employees drops below the threshold limit.

Coverage of Contractor Employees under the Scheme

Yes, individuals employed by or through a contractor are also covered under the PF Scheme.

Regards,

You have been rightly advised by the members. In both situations, PF is applicable; hence, it should be provided.