New Employee's PF Dilemma: Should We Deduct PF When Salary Exceeds Rs 15,000?

Gajenderrathore
A new employee joined our company earlier. In his previous company, his PF was deducted, and all PF money was withdrawn from his PF account as he was jobless for 6 months. Now in our company, he doesn't want PF deduction since his basic salary is more than Rs 15,000 per month. Should we deduct his PF or not?
KK!HR
Excluded Employees Under EPF Scheme

As per the EPF Scheme, the Act does not cover excluded employees, and clause 2(f) defines them as follows:

(i) .......

(ii) An employee whose pay, at the time he is otherwise entitled to become a member of the Fund, exceeds fifteen thousand rupees per month.

He is presently employed on wages exceeding the wage limit for PF coverage until the time the wage limit is below his salary/wages. Now, there is news of the PF wage limit being enhanced to Rs. 21,000/-. Therefore, review the position after the amendment to the PF Act is made.

Retention of Membership

As per para 26A(1), his membership in the PF Fund is not retained according to the following provision:

26A. Retention of membership

(1) A member of the Fund shall continue to be a member until he withdraws under paragraph 69 the amount standing to his credit in the Fund.

Since he has been unemployed for a long time (>6 months) and has settled his PF account, his membership of the Fund is not retained. Since he is presently out of the wage limit set under the Act for coverage, he could be considered to be out of PF coverage.
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