At the time of joining a new company, an employee's basic salary is fixed at Rs. 8000/-. Can the employer deny PF to the employee stating the reason that the basic salary is above Rs. 6500/-, which is the ceiling fixed for PF deduction?
From India, Kochi
Acknowledge(0)
Amend(0)
4From India, Kochi
Acknowledge(0)Amend(0)
Membership in the P.F. Scheme
If the employee is already a member of the P.F. Scheme from their past employment, they are entitled to continue their membership. Therefore, an employer is required to obtain a declaration in Form 11 from an employee joining an establishment. Otherwise, they become an excluded employee and cannot contribute to the scheme. However, the P.F. Scheme permits any employee to become a member of the scheme if a joint request is made by the employee and the employer to the P.F. Commissioner, who can then allow the employee to be a member of the Scheme.
Regards,
B. Saikumar
HR & Labour Law Advisor
Mumbai
From India, Mumbai
Acknowledge(0)Amend(0)
If the employee is already a member of the P.F. Scheme from their past employment, they are entitled to continue their membership. Therefore, an employer is required to obtain a declaration in Form 11 from an employee joining an establishment. Otherwise, they become an excluded employee and cannot contribute to the scheme. However, the P.F. Scheme permits any employee to become a member of the scheme if a joint request is made by the employee and the employer to the P.F. Commissioner, who can then allow the employee to be a member of the Scheme.
Regards,
B. Saikumar
HR & Labour Law Advisor
Mumbai
From India, Mumbai
Acknowledge(0)Amend(0)
As Mr. Sai said, if any new employee joins and had PF benefits in the earlier organization, then he/she is eligible for PF contribution. If there were no PF benefits in the earlier organization, then he/she shall be exempted.
From India, Bangalore
Acknowledge(0)Amend(0)
From India, Bangalore
Acknowledge(0)Amend(0)
If an employee has already become the member of the EPF then even if his salary is above 6500 then he has to continue as the member of the EPf even if he does not want’s to.
From India, Kochi
Acknowledge(0)Amend(0)
From India, Kochi
Acknowledge(0)Amend(0)
Court Order on PF Contributions by Employers
Please find attached the court order from the High Court of Chandigarh regarding PF contributions by employers on the "Basic" salary. I hope this will add value to your academic interests.
Thanks & Regards,
Swapna Sarith.
From India, Kochi
Acknowledge(0)Amend(0)
Please find attached the court order from the High Court of Chandigarh regarding PF contributions by employers on the "Basic" salary. I hope this will add value to your academic interests.
Thanks & Regards,
Swapna Sarith.
From India, Kochi
Acknowledge(0)Amend(0)
Mostly smaller companies and family-run companies take this as a tool for their benefit, but it is not a right practice. This can be done only in the cases as below:
1. A fresher who joins with a basic salary > Rs. 6500 can be exempted from PF.
2. An employee who has not opted for PF in his previous employment.
3. An employee who has left the previous organization, withdrawn his PF amount, and joined another company (mostly in case of a break in service).
For the above cases, Form 11 has to be signed by the employee for future inspection. Other than this, an employee who is already a member of EPF in previous employment cannot be exempted from EPF, even if he gets a basic salary above Rs. 6500/-. He can be restricted to pay Rs. 780/- (which is 12% of Rs. 6500).
Please review and let me know if you need any further clarification.
Best regards
From India, Mumbai
Acknowledge(0)Amend(0)
1. A fresher who joins with a basic salary > Rs. 6500 can be exempted from PF.
2. An employee who has not opted for PF in his previous employment.
3. An employee who has left the previous organization, withdrawn his PF amount, and joined another company (mostly in case of a break in service).
For the above cases, Form 11 has to be signed by the employee for future inspection. Other than this, an employee who is already a member of EPF in previous employment cannot be exempted from EPF, even if he gets a basic salary above Rs. 6500/-. He can be restricted to pay Rs. 780/- (which is 12% of Rs. 6500).
Please review and let me know if you need any further clarification.
Best regards
From India, Mumbai
Acknowledge(0)Amend(0)CiteHR is an AI-augmented HR knowledge and collaboration platform, enabling HR professionals to solve real-world challenges, validate decisions, and stay ahead through collective intelligence and machine-enhanced guidance. Join Our Platform.
EPF-Circular-da ted-23-May-2011 -Splitting-of-M inimum-Wages-fo r-the-Purpose-o f-PF-Contributi on-Not.pdf
Employee Benefits.doc