Understanding PF and ESI Deductions for Staff Over 58 in Residential Schools: What Are the Rules?

Dear Seniors,

We are a residential school. Please clarify if we need to deduct PF and ESI for our staff who cross the age of 58 but are still employed by us. We plan to give them their gratuity at 58 but continue to keep them as retired staff, paying only salary. Is it okay as per the PF Act and ESI Act?

Kindly give your understanding on the above.

Sanjive

Sir, in order to become an "employee," there is no age bar under the provisions of the ESI Act, 1948.

Dear Seniors,

We are a residential school. Please clarify if we need to deduct PF and ESI for our staff who cross the age of 58 but are still employed by us. We plan to give them their gratuity at 58 but continue to keep them as retired staff, paying only salary. Is it okay as per the PF Act and ESI Act?

Kindly give your understanding on the above.
Sanjive

You have to deduct the EPF and ESI of the retired employees. Both the acts are applicable to wages paid to the employee. Only EPS will be stopped, and the amount of EPS (Employee Pension Scheme) will be shifted to EPF after 58 years of age.

Stay Cool,
Atom

ESI Scheme will be applicable if the area under which your school is situated is notified; otherwise, it is not. ESI authorities publish such information in local newspapers, or you can obtain notification details from their office. Please do not solely rely on wage or age criteria. If an employee has reached the age of superannuation, which is 58 years, they are not eligible for benefits under the PF Act. There are other options available, which you can inquire about from the undersigned.

Regds,
RDS Yadav
Management Adviser and Trainer