Can We Deny EPF Membership to a New Employee with a Salary Over 15,000?

EPF Membership Query for New Employee

One employee has joined our company, and his basic salary plus DA exceeds 15,000. However, he has not previously been a member of the EPF. He is requesting to become a member of the EPF, limiting contributions to 15,000. Our management does not want him to be a member of the EPF.

My query is, since his basic salary exceeds the ceiling limit, can we reject his request and not allow him to be a member of the EPF? Or, according to EPF norms, are we obligated to provide him with EPF benefits despite his basic salary plus DA exceeding 15,000 if the employee demands it?

Please clarify.

Regards,
Aman Sharma

Employers have no choice but to allow employees to join the EPF. However, employers can limit their contribution to a ceiling of 15000/-.

An employee whose salary is more than Rs. 15,000/= will be an excluded employee as per Section 2(f) of the EPF & MP Act, 1952, and he need not be covered under EPF. Form 11 (Revised) may be obtained from the employee.

N. Nataraajhan
Sakthi Infogy Solutions Pvt Ltd
natraj@sakthimanagement.com

Dear @ Natraj,

One of our employees whose salary exceeds 15K is demanding to be a member of EPF. Could you please clarify if, as per EPF norms, the employee has the right to demand membership in EPF despite having a salary exceeding 15K?

Thank you.

Clarification on EPF Eligibility for New Joiners

Please note:

1. If a new joiner has a basic salary plus DA exceeding Rs. 15,000/- per month and does not have previous PF membership, they are not entitled to PF benefits. The employer is also not obligated to provide this benefit.

2. With mutual understanding, the employer can enroll the individual as a member by restructuring their salary. Both the EPF contributions can be adjusted in their CTC. In this scenario, the individual's take-home salary would be lower.

3. The EPF threshold limit is likely to be increased to Rs. 21,000/- to Rs. 25,000. In such cases, the employer's liability will increase whenever it applies. Therefore, it is advisable to enroll the individual today and restructure the CTC.

Regards, Pramod Thakar

Please ask him to fill out Form 11 under the PF Act. If he declares in the form that he was not a member of PF earlier and his basic and DA together are more than Rs. 15,000 per month, then you have the right as per the act and as per the provisions of the scheme not to consider the employee as a PF member. Every new employee must fill in Form 11.

Shrikant Prabhudesai
shrikant_pra@yahoo.com