Navigating Employee PF and Salary Challenges in a Small Startup: Seeking Advice and Insights

Hi, I'm Manasa, an MBA graduate with an HR specialization. I recently joined a small software startup company in Mysore, Karnataka. The company has 13 employees and has tie-ups with other companies as well as sister companies.

Queries and Concerns

1. Our company did not have PF before, but we recently recruited 5 employees for our Bangalore branch. These new employees have a higher CTC compared to those working in Mysore. The Bangalore employees are requesting PF, whereas the Mysore employees, due to their low current salaries, do not want any deductions. The management is not considering a salary hike for the current employees. The company plans to move the Mysore employees to the sister company to avoid the need for PF contributions since the number of employees will be less than 10. I seek your advice on how to address this situation and support our employees.

Incentive-Based Salary System

2. The management has an incentive-based salary system for software employees. I aim to have only marketing employees on an incentive-based salary structure. How can I communicate this to management and implement a standard salary format for our employees?

HR Initiatives

3. I also seek suggestions for HR initiatives to undertake in this startup company as I am still learning various HR activities.

Summary of Recent PF Rules

4. Lastly, could you provide a summary of the recent PF rules?

Thank you for your assistance. I look forward to your help.

ESIC and PF Applicability

As your company has 10 employees, it means you are required to register under ESIC (ESIC applicability is 10 or more employees, including Directors). PF applicability is for 20 or more employees employed in any organization.

Your second point is not clear, so more clarity is needed.

Working in a Startup

You are very lucky to have the opportunity to work in a startup company, where you can fully utilize your skills and knowledge to build a good workplace. No one remembers the 3rd or 4th person who worked in HR, but everyone remembers the first person who worked in the HR department.

Initiatives for a Good and Healthy Workplace

You may consider taking the following initiatives to develop a good and healthy workplace:
1. Create an environment for learning new things.
2. Implement Rooster awards.
3. Conduct ice breaker sessions.
4. Organize employee engagement activities.
5. Celebrate birthdays and anniversaries.

Recent PF Rule Changes

Regarding PF, a new rule has been implemented regarding the contribution of employees. Whatever allowances are provided by the employer in the payslip, those allowances will be considered as Basic for calculation purposes, but HRA is exempted.