Employees Earning Over Rs. 15,000 Refusing PF: What Are Our Options and Legal Steps?

Dear Seniors,

A few of our employees are not willing to become members of the PF, even though they earn more than Rs. 15,000. They do not want to contribute to the PF.

Questions Regarding PF Exemption

Question 1: Can we exclude employees from PF if their salary is more than Rs. 15,000?

Question 2: If so, can we exclude existing employees from PF?

Question 3: Similarly, can we exclude new employees from PF if they are willing?

Question 4: What is the procedure to do so?

Question 5: Is there any Act discussing PF-exempted employees?

Please share your valuable experience.

Thanks,
Anbarasu R.

As per my opinion, please share the advantages of EPF with all the employees. EPF has lots of long-term advantages, including tax benefits as well.

1) If their salary components such as Basic + TA + DA total more than 15,000 Rs, then you can ask your employees for non-contribution to PF.

2) No, once an employee is enrolled in the EPF scheme, they cannot be excluded.

3) Yes, at the time of joining, if an employee's BASIC + DA + TA exceeds 15,000 Rs, then the option is available for the employee to be exempt from EPF.

4) File Form No. 11 for excluded employees and maintain the database. During a PF audit by the government, produce all Form 11 records.

5) There are no supportive acts available for excluded employees.

Thank you.

Exemption Rule for PF Contribution

The exemption rule is very clear. A new employee whose starting salary is more than ₹15,000 (basic and DA) and does not have any existing PF account at the time of joining will have the option of being exempt from PF. In all other cases, they have to be a member of PF and contribute to it.

Existing employees who already have a PF account cannot stop their PF contribution.

If an employee was exempt earlier (₹6,500 rule) and their salary on the date of change (August 2014) had a basic and DA of less than ₹15,000, they are again covered and cannot claim exemption even if their salary subsequently goes beyond ₹15,000.