PF Liabilities for 100 Employees: Is Exempting High Earners Legal and Fair?

Considerations for PF Liabilities in Organizations with 100 Employees

If an organization has 100 employees and employer conditions for PF liabilities, employers should consider the following scenario:

Employers, with 90 employees out of 100 receiving more than ₹15,000 as basic salaries, may opt to take Form-11 from all 90 employees to be exempted from PF contributions. Is this legally acceptable? If so, what implications does this have for employee social security benefits? Employers are often reluctant to increase their liabilities in these situations.

EPFO Verification of PF Coverage

The EPFO must be satisfied that 90 employees out of 100 are not covered under PF. Submission of Form 11 alone is not sufficient. They can easily verify previous PF membership using Aadhaar number details. If it is found that employees were covered, the coverage will be applied retrospectively, along with penalties and interest, with or without penal proceedings for willful default.