Hi, I am working in Nagpur, Maharashtra in a real estate company. I have been working here for the last 8 months and I am a confirmed employee of the company as my probation period has ended.
My problem is that 2 months ago, the company registered for a PF account and wanted everyone to deduct PF, but a few, including me, refused. Since my basic salary is above 6500 INR, I opted out by filling Form No. 11. Now, 2 months later, we have been informed that starting from the month of April, the salary will be deducted with the PF amount. Both contributions will be taken from the employee only, meaning the company will not bear any contribution, and it is compulsory for everyone to deduct it.
I want to know if a company can do this, and if yes, how can I deny the situation and prevent them from implementing it.
From India, Mumbai
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My problem is that 2 months ago, the company registered for a PF account and wanted everyone to deduct PF, but a few, including me, refused. Since my basic salary is above 6500 INR, I opted out by filling Form No. 11. Now, 2 months later, we have been informed that starting from the month of April, the salary will be deducted with the PF amount. Both contributions will be taken from the employee only, meaning the company will not bear any contribution, and it is compulsory for everyone to deduct it.
I want to know if a company can do this, and if yes, how can I deny the situation and prevent them from implementing it.
From India, Mumbai
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Dear Mr. Azhar.a.m.Khan,
Employers can deduct only employees contributions i.e., 12% (Basic+ D.A), if the PF act is applicable to the organization. However, the contribution of the employer can't be deducted from employees salary. The maximum contribution that an employer is bound to make towards PF is Rs 780/- per mensem.
Form 11 is a declaration made by an employee taking up the employment in which the Employees’ Provident Fund and Family Pension Fund Scheme are in force. It absolutely doesn't say that you can opt out of PF.
- It is a form mentioning a simple declaration stating he is a member of PF/not.
- If he has not withdrawn his PF from the previous employer and his salary is more than 6500/- there, he would still remain a member of PF.
- In case if the employee has withdrawn his PF from previous employment and still seeks, he is not entitled for PF Exemption
- If an employee has joined services with a basic+da, 6500/- or more than it, he still can be exempted by filling form-11.
As I said earlier the contribution should be equal
- Employee – 12 % (of Basic + DA & Food concession allowance & retaining allowance, if any) and Employer – 13.61 % (of Basic + DA & Food concession allowance & retaining allowance, if any)
Calculation:_
{13.61 % is 3.67 % (PF) + 8.33 % (Pension Scheme) + 1.10 % (Admin. Charges of PF) + 0.5 % EDLI + 0.01 % (Admin Charges of EDLI)}
No, company in any case cannot do this and you may speak to the concerned HR regarding the same.
From India, Visakhapatnam
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995Employers can deduct only employees contributions i.e., 12% (Basic+ D.A), if the PF act is applicable to the organization. However, the contribution of the employer can't be deducted from employees salary. The maximum contribution that an employer is bound to make towards PF is Rs 780/- per mensem.
Form 11 is a declaration made by an employee taking up the employment in which the Employees’ Provident Fund and Family Pension Fund Scheme are in force. It absolutely doesn't say that you can opt out of PF.
- It is a form mentioning a simple declaration stating he is a member of PF/not.
- If he has not withdrawn his PF from the previous employer and his salary is more than 6500/- there, he would still remain a member of PF.
- In case if the employee has withdrawn his PF from previous employment and still seeks, he is not entitled for PF Exemption
- If an employee has joined services with a basic+da, 6500/- or more than it, he still can be exempted by filling form-11.
As I said earlier the contribution should be equal
- Employee – 12 % (of Basic + DA & Food concession allowance & retaining allowance, if any) and Employer – 13.61 % (of Basic + DA & Food concession allowance & retaining allowance, if any)
Calculation:_
{13.61 % is 3.67 % (PF) + 8.33 % (Pension Scheme) + 1.10 % (Admin. Charges of PF) + 0.5 % EDLI + 0.01 % (Admin Charges of EDLI)}
No, company in any case cannot do this and you may speak to the concerned HR regarding the same.
From India, Visakhapatnam
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The details given by you are sketchy. A comprehensive advice cannot be given based on such sketchy info. However, assuming that you joined the company afresh [that is, you were not employed earlier and contributing to EPF and even if contributing has closed your EPF account before joining this employment] with a pay of more than Rs 6500, you fall under the category of exempted employees as defined in Para 2 (f) of the EPF Scheme, 1952. In case you want to become a member of EPF even though you are an excluded employee, you have to give a joint declaration along with your employer. Once such a declaration is given, the employer has to contribute his share. He cannot make you contribute the employer's share also. This is against Para 31 of the Scheme. Para 31 reads thus: "Notwithstanding any contract to the contrary the employer shall not be entitled to deduct the employer's contribution from the wage of a member or otherwise to recover it from him.".
From India, Madras
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From India, Madras
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Dear Azhar ji,
The response by Bpugazhendhi is very correct and appropriate one. It seems from this response Bpugazhendhi has Thorough knowledge of PF Law. I only add to his response that the title of Para 31 is very clear on your query. It says: Employer’s share not to be deducted from the Members.
From India, Mumbai
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The response by Bpugazhendhi is very correct and appropriate one. It seems from this response Bpugazhendhi has Thorough knowledge of PF Law. I only add to his response that the title of Para 31 is very clear on your query. It says: Employer’s share not to be deducted from the Members.
From India, Mumbai
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Dear Bpugazhendhi,
I appreciate your response, which is very correct and to the point regarding the query. I had a glance just now at some of the postings by you in the past and found that your postings are very appropriate with thorough study. Very few members interact in this way on this forum. Keep it up.
I further request you to kindly view the link provided below and share your comments:
https://www.citehr.com/455974-no-emp...f-company.html
To be frank, I am now totally confused after reading all the postings in this thread from the above link; therefore, I have chosen not to participate there. Moreover, my schedule is very tight.
From India, Mumbai
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I appreciate your response, which is very correct and to the point regarding the query. I had a glance just now at some of the postings by you in the past and found that your postings are very appropriate with thorough study. Very few members interact in this way on this forum. Keep it up.
I further request you to kindly view the link provided below and share your comments:
https://www.citehr.com/455974-no-emp...f-company.html
To be frank, I am now totally confused after reading all the postings in this thread from the above link; therefore, I have chosen not to participate there. Moreover, my schedule is very tight.
From India, Mumbai
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