Can Employees Opt Out of PF & ESI? Seeking Clarity on Rules and Regulations

Dear All,

Is there any rule for PF & ESI, that an employee who is not interested can withdraw? If so, could anyone of you please tell me the Act & Rule?

With Regards,

Uma.M

Hi Uma,

If the salary of an employee is more than Rs. 6500, then PF becomes optional for him. He can decide not to deduct PF from his salary. But he has to submit Form No. 11 for that.

However, once an employee becomes a member, he cannot withdraw from it.

In the case of ESI, there are no such rules that exist.

Hope this will help you.

Regards,
Surya

Hi Uma,

If the salary of an employee is more than Rs. 6500, then PF becomes optional for him. He can decide not to deduct PF from his salary. However, he has to submit Form No. 11 for that. Once an employee becomes a member, they cannot withdraw from it.

In the case of ESI, there are no specific rules that exist.

Hope this helps you.

Regards,
Surya

The extant Rules of ESI and EPF are as follows:

ESI: Contribution by employees and employers is mandatory for all "employees" whose gross wages/salary are Rs. 10,000 or less. Employees whose total gross wages/salary exceed Rs. 10,000 are exempted from the ESI scheme.

EPF: Employees whose pay (basic+DA) exceeds Rs. 6,500 are excluded.

Hi Surya,

Thank you for the information. Could I please have more details on the government rules regarding PF & ESI withdrawals for employees who are not interested?

With Regards,
Uma.M

Hi,

It is not possible for an employee to withdraw from ESI and EPF schemes unless he reaches the status of an exempted employee, i.e., his gross pay should be more than Rs. 10,000 in the case of ESI and his basic pay is more than Rs. 10,000.

Detailed information is available in the ESI Act & Rules and EPF Act & Rules, which are available in all leading bookstores dealing with law books.

S. Krishnamoorthy

Dear sir,

I want to withdraw my membership from ESI. My company deducted Rs. 694 (700) in the month of Dec-15. Please let me know the rules to help me withdraw my membership.

Hoping for a favorable response shortly.

Shyam Kr. Tripathi
9451626109