Understanding PF Exclusion and EPF Regulations: Key Insights and Guidelines

Dear Seniors,

I have some queries regarding EPF.

1. I want to know about the "Excluded Employees" in PF.

2. Is there any Notification or Circular from EPFO for the non-deduction of PF Contribution from employees whose salary is above 15000/- p.m.?

3. What documents have to be provided to the PF inspector for the employees whose PF is not deducted, as their salary is above 15000/- & 18000/-?

Please suggest and guide.

Regards,
Yugal Panchal
7405375693

Hello Yugal,

There were several discussions that happened in this forum on the exclusion of employees from EPF contributions.

In the year 2014, the coverage was increased from a basic salary of 6500 to 15000/-.

If an employee wants to be excluded from EPF deductions, he needs to fill out Form 11 and submit it to the employer. In that form, there is a column that states whether the employee was a member of EPF earlier or not. They need to tick or untick it.

Apart from the above, there were no clear case laws available to substantiate your point in front of the EPF officials. You can show the Form 11 of all employees whose basic salary is more than 15k. As the act itself states that employees whose basic salary is less than 15k are required to be covered under this act.

I have found some case laws that can be shown to them if required:

1. [Prakash Consultancy Services: An employer is liable to pay EPF contributions along with damages and interest if it fails to prove that its employees are 'excluded ones'](http://blog.pcsmgmt.com/2015/09/an-employer-is-liable-to-pay-epf.html) -- This case law states that the employer should provide the appointment orders, payslips/payroll, and other related documents to EPF officials to prove that their basic pay is more than 15k.

2. [Indian Kanoon](https://indiankanoon.org/doc/173456055/?type=print) -- Here it states that the basic pay should be more than 15k, not the whole salary. So you have to make sure that basic pay + DA should be more than 15k to exclude them from EPF contributions.

I will try to post some more case laws if I could find them in the future.

I hope you realize that only someone who joined your organization at a salary (basic and DA) above ₹15000 is exempt. Someone who joined at a lower salary and then received an increment is not exempt.

Furthermore, the employee concerned should not have any PF account existing at the time of joining the company.

If the member, while joining the organization, gives a declaration in Form 11 stating that he was not a member of EPF previously or had withdrawn, and if his present PF wages are above 15K, he will be treated as an "excluded Employee," and CPF will be deducted.

Thanks,
Vidyadhar Bhat

Hi,

If an excluded employee wants to become a member of the PF, say after two to three years of joining, can the employer allow him from that date? What does the PF Act say on this?

Regards,
Puran Dangwal

Yes, an exempted employee can join. But once he joins, both the employer and the employee will be liable to pay PF, and they can't stop it at a later date.