New Hire with Salary Above 15000: Are We Required to Offer PF Benefits If They're Already an EPF Member?

Hi, my company is registered in EPF. However, when we hire a new employee whose salary is above 15000/-, we do not count them in PF deduction as per the rule. My question is, "Is it necessary to provide PF benefits to a new employee if we offer them a salary above 15000/-, and they are already a member of EPF (receiving PF benefits from a previous employer)? Are we obligated to provide them with PF benefits?"

Employer Obligations Regarding EPF Contributions

An employer cannot bar any employee from joining the EPF. However, the employer can restrict their contributions up to the ceiling of ₹15,000 (employer contribution ₹1,800). The employer must always offer and ask the employee to be a member of the EPFO. If the employee has never been a member of the EPFO in their past service and their present salary is above the ceiling limit of ₹15,000, they must inform the employer in writing that they have never been a member of the EPFO and do not want to participate.

Starting from December 2016, EPFO has begun collecting data on such employees during ECR submission. In case of any non-compliance, the employer would be fully liable for both shares of contributions, plus interest and penal damages.

@ U S Sharma,

Is it necessary for us to provide PF benefits to an employee earning above 15000/- if they were already receiving PF benefits from their previous employer?

Employers have to offer EPF benefits to all employees, whether they were previously EPF members or not. If the member had been an EPF contributor at any time in the past, then he must join. Employers have no right to restrict any employee from joining EPF; they can only restrict their own contributions.

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I have corrected the spelling and grammar errors in the text and formatted it into proper paragraphs.

Irrespective of previously being an EPF member, if the employee is an active member of EPF at the time of joining a new organization, then the new employer shall be bound to cover him/her within the purview of EPF. However, if the employee had been a previous member of EPF but at the time of joining the new organization, he/she is not an active member of EPF, in this scenario, the employer shall not be bound to cover him under EPF if the PF chargeable salary exceeds the ceiling limit, i.e., 15K. For the employee who is not an active member of EPF and also drawing basic plus DA exceeding 15K, you can convince them not to be a member of EPF. If they agree, just obtain Form 11 duly signed by the concerned employees not agreeing to the same, and keep these forms for further reference.

Thanks & Regards,
V. SHAKYA
HR & Labour Laws Advisor

Dear All,

In PF, what is the 15k ceiling? Is it based on basic, gross, or in-hand salary?

Query on EPF Membership for New Employees

Hi, my company is registered with EPF. However, when we hire a new employee whose salary is above ₹15,000, we don't include them in PF deductions as per the rule. My question is, "Is it necessary to provide PF benefits to a new employee if we offer them a salary above ₹15,000 and they are already an EPF member (receiving PF benefits from a previous employer)? Are we obligated to provide them with PF benefits?"

Answer

If the member has previous employer membership, you must continue them as an EPF member and restrict their PF wages to ₹15,000. If the member has no PF membership or has withdrawn their PF, and they join an organization where PF is applicable, if their salary at the time of joining is above ₹15,000, they can be treated as an excluded employee. Even if you want to provide them with PF benefits, they will only be a member of EPF, and no EPS will be deducted.

Thanks,

Vidyadhar Bhat

Please note that salary refers to PF wages exceeding Rs 15,000.

Thanks,
Vidyadhar Bhat

Eligibility for EPF and EPS for New Employees

1. If a member is newly joined and their EPF wages exceed ₹15,000, they are not eligible for EPS. However, EPF contributions must still be made.

2. If a member was already an EPF member in a previous organization and has not withdrawn or claimed for settlement, you should first link their UAN and check their previous company's wage limit. If it does not exceed ₹15,000, they are eligible for both EPF and EPS.

3. If a member was already an EPF member in a previous organization and has not withdrawn or claimed for settlement, you should first link their UAN and check their previous company's wage limit. If it exceeds ₹15,000, they are not eligible for either EPF or EPS.

This is what I am aware of. Please correct me if I am wrong.

Dear All,

The excluded employee is not necessary to join the EPF Scheme. An excluded employee is defined as follows:

1. A member who has withdrawn the PF.
2. An employee whose PF wages exceed 15K at the time of joining.

If the employee is already a member of EPF, you are required to continue his membership by adding him to your establishment in PF. This is not optional.

Thanks,
Vidyadhar Bhat