How to Handle Employees Requesting PF Amount as Salary Without Legal Issues?

Hello, Recently, we have enrolled some of the employees in the PF. Earlier, these employees were given consolidated payment and worked as consultants. Now, these people want the PF amount not to be deducted and are asking us to add it to the salary. Employer contribution is also not required by these individuals. In summary, they want the same salary as when they were employed as consultants.

Please guide us on how to handle this case so that no statutory issues arise.

If they were covered under the PF Act 1952, there is no escape from continuing coverage as per statute. If they were not covered at all and they are drawing a salary more than the threshold limit of coverage (Rs. 15,000/- pm now), then there is no need. However, you will have to inform EPFO about it. Otherwise, there will be issues of non-compliance, and the penalties are financial as well as imprisonment.

Opting Out of EPF

If an employee wishes to opt out of EPF, they need to fill out Form 11 when they join their first job. They must furnish a letter addressing their employer, stating their desire to opt out of the scheme. However, if the employee makes even a single EPF contribution, this option ceases to exist.