PF Contributions Over 15000: What to Do When an Employee Opts Out?

Hello everyone,

Could someone please tell me what the procedure is when the PF amount exceeds 15000, and the employee does not wish to contribute to PF? What actions should be taken in this situation?

Thanks & Regards,
Yash Karale

Employees Covered Under EPF Act

- Any employee earning wages of Rs. 15,000/- or less (current ceiling limit).
- Any employee already covered under the EPF Act who, due to increment or promotion, has wages increased above the ceiling limit (Rs. 15,000/-) will not be exempted. In this case, both contributions are restricted to Rs. 15,000/- only.
- Any employee who had an EPF account in his/her previous company and joins a new company that also has EPF will be covered under the EPF Act.

Employees Exempted Under EPF Act

- Any employee who joins a company with a higher ceiling limit (above Rs. 15,000/-) and was not an EPF member in previous companies may be exempted from the EPF Act. If the employee is covered under EPF, then both EE & ER contributions (12% of EE share + 12% of ER share = 24%) shall be paid as EPF only, and EPS is not applicable to them.

EPF Coverage and Contribution Limits

Jeevarathnam has rightly advised you that if you have been covered under the EPF scheme with your earlier employer, you have no choice but to be automatically covered under the EPF Act with your new employer. In this process, if the wages are increased above the ceiling limit of Rs. 15,000/-, then the employee and employer contributions will be restricted to monthly wages of Rs. 15,000/- only. If you have withdrawn your PF accumulations while not in any employment and join a new company with a salary above Rs. 15,000/-, then you will be exempt from coverage under the EPF Act.

Regards,
BS Kalsi

If the employee was already covered under PF and joins a new organization with a salary higher than the PF ceiling, he can 'technically' be excluded. However, this requires the employee to give a 'false declaration' under Form 11. So the short answer is Yes.

If the employee was not covered under PF in his previous employment and joins your organization on a salary above 15,000, he can give a declaration under Form 11 and be exempted. Hence, the answer is Yes. In this case, there is no false declaration by the employee.

Hope this helps.

Regards,
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