Can We Cover an Excluded Employee Under EPF Now and What About Past Years?

Dear All,

An excluded/exempted employee under EPF wants to be covered under PF now. Even the management is ready to cover him under the Act. For the last 4 years, due to his higher salary, he was not covered under EPF. Can we do so? If we cover now, what will be the position of the previous 4 years? Please suggest.

Voluntary EPF Coverage for Non-Members

If a person is not an EPF member and their wages are above the ceiling limit, both the employee (EE) and employer (ER) can opt for voluntary contributions to cover the employee.

As this is not mandatory coverage, both the EE and ER contributions are calculated from the day of coverage. It is not required to contribute based on the previous month's wages.

According to the new EPF rules, if an employee joins with higher wages but is not an EPS member, they are not entitled to EPS. Therefore, both 12% of EE and 20% of ER, totaling 24%, shall be accounted for EPF only. There should not be an EPS contribution.

Dear Jeeva,

As per your advice, excluded employees can be covered from the date they wish to become a member. Does the PF Act say anything on this? What happens if today one excluded employee wants coverage, tomorrow another, and the day after that one more? Will there be administrative hassle during inspection?

On the monetary front, there should not be any problem, as even the employer's share is a part of CTC in almost all organizations these days.

Regards,
Puran Dangwal

Where is the administrative hassle during inspection? I don't think there is any such hassle to add an excluded member to EPF. It is the benefits that the employee is getting from the organization.