Regarding New Rules Of Pf Department After 01.09.2014

Dear All,

Thanks for calling me Dhuka. I have one query regarding PF. If an employee joins with a 30,000 basic salary and has no previous PF account number, they are considered a new employee. How should EPF and EPS be deducted as per PF rules after 01.09.2014?

Please provide the necessary information.

Thank you.

Hi,

Your query is not clear. If you hire any employee who is not an earlier member of EPF and the basic salary is above 15000/-, then he/she is exempted from EPF. If you still need to provide EPF benefits, both 12% of EE and 12% of ER need to be contributed to EPF only. There should be no EPS contribution.

Dear,

Thank you for reaching out.

My query is regarding a situation where a newly joined employee withdraws all PF amount from their previous PF account without disclosing the previous PF ID to me, and I fill up Form No. 11 on their behalf. In the above scenario, if the employee's basic salary is more than ₹15,000, how should the EPF and EPS be bifurcated?

Thank you.

PF Form No. 11 (New) must be completed by the Employee/Member, not by the Employer. Could you please clarify how to differentiate between EPF and EPF? Kindly rephrase your question for clarity.

Dear All,

Yes, Form 11 is filled out by the employee, and the employer keeps it. However, my question is: if an employee joins with a basic salary of 24,000 and declares that they are a new employee without a previous PF account number, does that mean they can withdraw their previous PF from their old account and still contribute PF based on the 24,000 basic salary? In that case, how should PF and EPS be deducted according to the rules after 01.09.2014 for new employees? Can this new employee become a pension member or not?

For new employees becoming first-time members, you can restrict EPF contributions to Rs 15,000/- (@12%, i.e., Rs 1,800/-). Consequently, he becomes a member of EPS on EPS wages of Rs 15,000 (@8.33%, i.e., Rs 1,250/-).

Though an employee's basic wages are more than Rs 15,000/-, you can restrict to the EPF & EPS wage ceiling as of the date, i.e., Rs 15,000/-.

Dear Dhuka,

You are not entirely clear. One thing is for sure, he was working elsewhere and was a member of EPF, and he withdrew all the credit when he left. While joining with you, he stated in his Form 11 that he was a fresher. If you treated him as such in 2014 (presumably his Date of Joining), where is the question of Form 11? Am I correct? Incidentally, you are asking this query for action that was due on 1.9.2014, after so much delay. What were you doing and what did you do in this case? Now, it's illegal to recover the past difference as arrears, both the employer's and the employee's contributions, and the interest due thereon on your company's debit. Only then will you get the appropriate guidelines.

Dear Sir,

I have only one question: can he become a pension member? If an employee wants to contribute more than 15000 basic to the PF...

He cannot become a member of EPS by virtue of his EPF wages being more than Rs15,000 and becoming a fresh PF member.

Your questions are not clear, unfortunately, even after everyone else has asked. Still, let me try and answer them.

If the employee now wants to be a PF member, he can do so. The exemption from PF at 15000 basic is at the option of the employee, not the employer. So, he can now join as a member of PF, and by law, you are then required to deduct PF at 12% of his basic or 12% of ₹15000, whichever is lower. If he wants to contribute a higher amount, that would go as voluntary PF. It can be any amount he wants not exceeding 50% of gross wages (this restriction is in Sec 6 of the Payment of Wages Act, not in the PF Act).

The employer needs to give 12% of basic or 12% of ₹15000 as his contribution, irrespective of how much higher voluntary PF contribution the employee is making. All the money will be credited to his PF account and nothing to his pension account as he is not eligible for PF.