Can We Exclude a Probationary Manager from PF Membership Based on Previous Non-Enrollment?

Dear Members,

Greetings.

Kindly provide a legal opinion on the following matter:

We have appointed a Manager on probation, and his basic salary is fixed at 20,000 (Gross is 41,000). He mentioned that as he was not a member of the PF in his previous company, he requests to be excluded from the PF here as well.

Is it possible to exempt him from PF membership even though he is on probation? Or is there a rule that mandates he must be covered under PF?

Kindly provide clarification.

Regards,
Nishant

Dear Srikant - You are talking about ESIC, whereas the question raised by Nishant pertains to PF.

Dear Nishant - Yes, you can show the member under the exempted category. Please ensure you take all details and get Form 11 filled by the individual.

Regards,
Murali

Dear Nishant, The PF ceiling is up to ₹15,000. Hence, if an employee's basic is ₹20,000, there is no requirement for PF deduction as he was not receiving it before as well. Just have the form filled out by him. Ask him to submit a letter for this. Above the ₹15,000 ceiling slab, it is the company's discretion to cover PF or not.

Contract Staff Benefits

Contract staff work as per the contract agreement (appointment letter); their other benefits remain the same (i.e., leaves and other financial benefits). You have to include a clause in your appointment letter that will prevent them from joining any group or union.

I hope your questions are clarified.

Regards, Mitali

Dear Mitali,

Thank you for the clarification, and just one more... Will there be any legal issue if a staff is employed on a contract basis for a very long period if we renew and keep him on a contract?

Regards,
Nishant