Navigating PF Compliance: How to Handle Zero PF Employees Post-Lockdown?

PF Compliance Issue in a Factory

The factory has been ESI/PF registered for a long time but lost its employees after the lockdown. All new employees who have joined now have a salary (Basic + DA) above 18,000/-. As a result, there are currently 0 employees under PF, while ESI still has some employees.

Addressing the PF Issue

How should we tackle the PF issue? Will it be a problem that there are 0 PF employees? How can we manage EPFO department compliance when the factory has 0 PF employees? (The new employees do not have any old PF account or UAN number.)

EPF Act Applicability for New Employees

If the EPF Act is not applicable to the new employees because their salaries exceed the threshold limit for coverage, where is the question of "tackling the PF"? You simply have to leave the matter as it is. If the EPF authorities come for inspection, you need to show them the register of wages to prove the fact. If your wage structure complies with the definition of wages under the Act, there will be no problem at all.

Voluntary Enrollment Option

If you are more employee-centric and your employees are also willing, you may opt for voluntary enrollment.

FORM-11 Declaration for EPFO Membership

Whenever Mr. Umakanthan M is mentioned, please obtain a FORM-11 (Revised) declaration from the employee stating whether they were a member of EPFO previously or not. If any employee was a member before, their PF should continue even if their salary exceeds the threshold limit for coverage, provided the employee has not closed their earlier PF account.

S K Bandyopadhyay (WB, Howrah)
CEO-USD HR Solutions

Thank you for your timely responses, sirs. The employer was worried that the department would raise an issue regarding the presence of previous PF employees. That is why I asked how to tackle the issue, but your response has now resolved the matter.

@Nanu Sir, a general query: If an employee who had PF has closed his account (i.e., withdrawn all the money from the PF account), should he mention the old PF in Form 11, or can he opt to forgo PF and start receiving a higher salary from the new firm (which has PF)?