PF AND ESI - Is it possible to give only ESI service?

An employee has a CTC of 20000 and he wants only ESI service. he didn't want the PF facility .. Is it possible to give only ESI service

Hi,

PF and ESI is statutory and compulsory and not as per the wish of the employees. You can explain to the employee about the benefits of PF as a compulsory saving for his future, pension facilities after 9.6 years of service, EDLI benefits etc.

The decision on whether or not to give PF to an employee is decided by law and not the desires of an individual employee.
If the person has a starting salary (when he joined your organisation) of more than ₹ 15,000 (computed at gross less HRA), and does not have a PF Account (never had or withdrawn all the money), then he may be eligible for exemption. Please refer to the PF regulations for the same.

Please note that if he is already under PF then it can not be stopped just because his salary went higher.

You need to inform the employee that it is a statutory due and can not be skipped. In case he does not know the benefit, I suggest you inform him of the same too.

Dear HR CLAL,

Some additional comments on the issue following Mr.V.M.L's reply. You have mentioned about CTC summing up to Rs.20000-00 p.m. But CTC is an all inclusive cost of employment which comprises of the components falling under the definitions of the term wage under both the ESI Act,1948 and the EPF Act,1952 and the excluded ones too.
Therefore, threshold wage under the ESI Act, being above the CTC, neither the employee nor the employer has any choice in the enrollment.

Regarding enrollment into EPF, the wage threshold is Rs.15000-00 pm only. Out of the CTC of Rs.20000/=pm, if the components constituting wages is Rs.15000/= or below, then also there is no choice to be outside the EPF. Moreover, if he is already a member of the EPF, then also he has to continue of course limiting the contribution to the threshold amount of wages.

If the employee's previous pf account has been closed. And he don't want to continuous again

If the conditions I mentioned above are fulfilled, then yes
if his starting salary was less than 15,000, then no

If the person has a starting salary (when he joined your organisation) of more than ₹ 15,000 (computed at gross less HRA), and does not have a PF Account (never had or withdrawn all the money), then he may be eligible for exemption.



Can you provide any database for this (Please refer to the PF regulations for the same)

What database do you expect when this a part of the law?
if you are looking for the provisions, do go and read the law

And I suggest you be clear in your communications so that you do not confuse people