25k PF/ESI applicable or not? Bonus applicable? Employee says he won't deduct anything

The employee joined the firm 9 years ago with an 8k salary in hand and received ESI and PF benefits. He left the firm after 1 year and withdrew all his PF contributions. Subsequent firms did not provide him with PF/ESI benefits as confirmed by his UAN. Now, he has returned to the first firm for a job and wishes to rejoin with a 23k salary. The question arises whether the firm should provide him with PF/ESI this time.

There is confusion regarding this issue:
1. If PF/ESI is still mandatory, the employee insists that no deductions should be made from his account, which would result in a higher CTC for the firm, amounting to 23k + PF (1.8k + 1.8k) + ESI.
2. Alternatively, he argues that since he has a nil balance in his account, he does not require PF/ESI, and the firm does not need to increase the CTC.

The firm requires employees but is hesitant to incur additional costs. If the explanation provided is unclear, please let me know, and I will attempt to clarify.

Furthermore, the employee states that he will only join if a yearly bonus is offered. However, the firm has informed him that bonuses are granted only if the salary is below 21k. The employee asserts that bonuses should be given to all employees and it would be unfair to exclude him. This situation has left the firm puzzled as he is the only employee with the highest salary in the company.

Dear Vignesh,

As I understand from your narration, the particular employee joined your company 9 years ago and left after a year of service during which he was a member of EPF and ESI based on the salary he was receiving then. Now, after a break of 8 years of employment elsewhere without enrollment into both EPF as well as ESI for reasons unknown, he wishes to join your company again with a salary of Rs 23k per month and insists on exclusion from both.

Therefore, in my opinion:

(1) By virtue of his proposed monthly salary, he is not required to be covered under the ESI Scheme.
(2) As per your narration, he had already withdrawn the entire amount from his EPF account and ceased to be a member of the Scheme for the past 8 years. Moreover, his proposed salary certainly exceeds the threshold limit for EPF. Therefore, he need not be covered under the EPF at present as per his request.
(3) Regarding statutory bonus, the PB Act, 1965 does not prohibit the payment of bonus to those employees drawing a monthly salary over and above the threshold limit. If you deem that he is an indispensable employee, no harm in adding a bonus clause in the contract of employment.

Dear Sir,

I know from an employee that he withdrew his PF amount, which the firm gave him 9 years ago, and has not received any PF from other firms since then. However, I am unsure whether this means he is no longer considered a PF employee because someone mentioned to me that once a person becomes a member of PF, they remain a member even if they withdraw their entire amount. I am confused about what is correct and what is not.

Can you please help me understand this?

If he took out all his money from PF, then the account gets closed automatically. If the account still exists and shows active, then he is lying about not getting PF contributions earlier.

Ok, my doubt is, and please correct me if I am wrong, I thought that the entire PF money cannot be taken out until 58 years because pension money will remain. But the employee's age is only 35 now. So, he did take out whatever amount he could, I guess. In that situation, is he a PF member now or not based on the previous information provided.