EPS Contribution and Leave Without Pay
As per the PF & Misc. Act, the EPS contribution is 8.33% of ₹15,000/- maximum. There are two types of organizations: one that restricts the employer's portion of the PF contribution to ₹15,000 per month, and another that contributes beyond ₹15,000 per month, usually based on actual Basic & DA.
Impact of Leave Without Pay on PF Contribution
In the case of leave without pay (LWP), for organizations paying contributions exceeding ₹15,000 per month, even after LWP, there is a possibility of paying PF contributions above ₹15,000 per month. There should not be any "no contribution period" as the EPS contribution will be based on ₹15,000. However, many organizations mistakenly mark the employee as in a "No contribution period" based on LWP days, even though contributions have been made on ₹15,000. EPS calculation for pension payments is based on the contribution, and if it is consistently ₹15,000 every month, there will not be any non-contribution period.
Recommendation
In this case, I suggest cross-checking with the HR department for the actual facts. If there is any discrepancy, whether by the employer or EPFO, please address the issue with the EPFO local area office to resolve it.
Regards, S K Bandyopadhyay (WB, Howrah) CEO-USD HR Solutions [Phone Number Removed For Privacy-Reasons] [Email Removed For Privacy Reasons] USD HR Solutions – To strive towards excellence with effort and integrity