Dear All,
Employees whose salary is more than 6500, and they are not members of Provident Fund, now the company is going to make all employees members even those whose salary is more than 6500/-. However, not all employees are interested in being contributors. Can the company make them PF members forcefully?
With Regards,
Bhanu Pratap Singh
From India, Pune
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3Employees whose salary is more than 6500, and they are not members of Provident Fund, now the company is going to make all employees members even those whose salary is more than 6500/-. However, not all employees are interested in being contributors. Can the company make them PF members forcefully?
With Regards,
Bhanu Pratap Singh
From India, Pune
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As per the PF Act, Maximum salary Limit is Rs.6500/- which is compulsory and above that its upto the employee for the deduction of PF.
From India, Ahmadabad
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From India, Ahmadabad
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As stated above, PF is mandatory for those whose salary does not exceed Rs 6500. However, if the company decides to include all employees, including those earning more than Rs 6500, under the EPF and if many employees are unwilling to accept it, then it becomes a dispute within the organization in which the EPF is not a party, and the EPF Act is not involved. The EPFO will not prevent any employee from joining the scheme, but it will also not allow anyone to opt-out of the scheme.
If the employer is willing to contribute the employer's share on such higher salaries (more than 6500), why do employees not agree to it? After all, the scheme is a good investment scheme with Income Tax benefits. Moreover, the salary ceiling of Rs 6500 can be revised by the government at any time to include more employees in the scheme, even retrospectively.
Regards,
Madhu.T.K
From India, Kannur
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If the employer is willing to contribute the employer's share on such higher salaries (more than 6500), why do employees not agree to it? After all, the scheme is a good investment scheme with Income Tax benefits. Moreover, the salary ceiling of Rs 6500 can be revised by the government at any time to include more employees in the scheme, even retrospectively.
Regards,
Madhu.T.K
From India, Kannur
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But is there any legal obligation on the employer's side to follow any rule, such as requiring an undertaking from the employee before enrolling them as a member? Can an employee raise any legal issues if PF is deducted?
From India, Pune
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From India, Pune
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i too wanna ask something ............ IF the salary is more than rs 6500 and employer is not willing to contribute towards PF, will it involve any legal complications?
From India, Hyderabad
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From India, Hyderabad
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Dear Sir,
Please confirm if employees (whose salary is more than 6500) accept this and also fill in form 2. The individual contributions to be made will be as per the individual salary drawn by them or will be a fixed amount of 6500.
Swati
From India, Bangalore
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Please confirm if employees (whose salary is more than 6500) accept this and also fill in form 2. The individual contributions to be made will be as per the individual salary drawn by them or will be a fixed amount of 6500.
Swati
From India, Bangalore
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The undertaking is very much necessary once your management decides to recover the employees' contribution for whom the salary limit is more than Rs. 6500 and were your employees for quite some time and got their many monthly salaries without any PF deduction since their salary was more than Rs. 6500/-. Even otherwise, once the employer is ready to contribute Rs. 780/-, which is additional income, I don't know why the employees should object to it.
Regards, S. Kumarasubramanian
From India, Madras
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Regards, S. Kumarasubramanian
From India, Madras
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If it is more than Rs. 6500/-, then there is no need for any employer contribution for that employee provided that at the time of joining itself his wages are fixed more than 6500 and no deduction was made from him as employee contribution from day one of his joining.
On the other hand, if it was recovered from him, then the employer is also legally bound to contribute the same amount. The only thing is no employer ever legally needs to pay more than Rs. 780 as employer contribution. It is so simple. Once covered forever covered.
Regards, S. Kumarasubramanian
From India, Madras
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On the other hand, if it was recovered from him, then the employer is also legally bound to contribute the same amount. The only thing is no employer ever legally needs to pay more than Rs. 780 as employer contribution. It is so simple. Once covered forever covered.
Regards, S. Kumarasubramanian
From India, Madras
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Dear Mr. Bhanu Pratap Singh,
As my friends stated, PF is mandatory for all the employees whose salary is less than ₹6500 per month. Frankly, I don't understand the reason why the employees are not willing to contribute to the PF if their salaries are more than ₹6500. One reason I can think of is that there is a reduction in the net pay after contributing to the PF. However, employers can overcome this by marginally increasing the gross salaries, thereby protecting their net pay even after PF contribution.
On the other side, PF contribution will result in an increase in the CTC of the employees and provide protection to their families. Since all the employees covered under PF are eligible for a pension, in case of any unfortunate event, the family will receive a pension for their survival. You can convince the management to protect the net pay of employees, explain these benefits to them, and bring all the employees under PF.
Ramasastry AM-HR
From India, Hyderabad
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As my friends stated, PF is mandatory for all the employees whose salary is less than ₹6500 per month. Frankly, I don't understand the reason why the employees are not willing to contribute to the PF if their salaries are more than ₹6500. One reason I can think of is that there is a reduction in the net pay after contributing to the PF. However, employers can overcome this by marginally increasing the gross salaries, thereby protecting their net pay even after PF contribution.
On the other side, PF contribution will result in an increase in the CTC of the employees and provide protection to their families. Since all the employees covered under PF are eligible for a pension, in case of any unfortunate event, the family will receive a pension for their survival. You can convince the management to protect the net pay of employees, explain these benefits to them, and bring all the employees under PF.
Ramasastry AM-HR
From India, Hyderabad
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There are a number of employees who are even ready to contribute a higher percentage (higher than 12%) as a voluntary contribution. In the case of voluntary contribution, of course, the employer need not contribute such a higher percentage, but their contribution will be restricted to the statutory contribution, 12% + administrative and other charges as the case may be.
If the employer wishes that all shall be covered by the scheme, it is certainly for the benefit of employees only. There are employers who deduct and contribute PF from the gross (Basic + DA) salary, though they are not supposed to contribute for the amount of salary exceeding Rs 6500. In some cases, it will be like all will be covered, but the PF will be deducted and contributed on the salary of Rs 6500 only. In fact, this is the amount that qualifies for contribution towards the Employees' Pension Fund.
In both cases, the employer will be incurring additional expenditure. The gravity of such expenditure increases when we find that an employee once covered by EPF will continue to be covered irrespective of any hike in salary, and the employer cannot withdraw themselves from it once their financial condition goes negative.
Normally, there will be an agreement between the employees and the employer in this regard.
Regards,
Madhu.T.K
From India, Kannur
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If the employer wishes that all shall be covered by the scheme, it is certainly for the benefit of employees only. There are employers who deduct and contribute PF from the gross (Basic + DA) salary, though they are not supposed to contribute for the amount of salary exceeding Rs 6500. In some cases, it will be like all will be covered, but the PF will be deducted and contributed on the salary of Rs 6500 only. In fact, this is the amount that qualifies for contribution towards the Employees' Pension Fund.
In both cases, the employer will be incurring additional expenditure. The gravity of such expenditure increases when we find that an employee once covered by EPF will continue to be covered irrespective of any hike in salary, and the employer cannot withdraw themselves from it once their financial condition goes negative.
Normally, there will be an agreement between the employees and the employer in this regard.
Regards,
Madhu.T.K
From India, Kannur
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PF Contribution
The company has no right to force the employees to join the PF contribution for those who are getting more than Rs 6500. The maximum ceiling of PF amount is Rs 6500. It is a very good effort taken by the management, but I do not know why the employees are not interested. It is a very useful scheme for the long term.
MANOKAVIN
From India, Coimbatore
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The company has no right to force the employees to join the PF contribution for those who are getting more than Rs 6500. The maximum ceiling of PF amount is Rs 6500. It is a very good effort taken by the management, but I do not know why the employees are not interested. It is a very useful scheme for the long term.
MANOKAVIN
From India, Coimbatore
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Dear Friend,
If any employee is drawing a basic salary of more than Rs. 6500/- and joining the PF scheme for the first time, then only he/she can choose to be exempt from PF deduction. Once you are a member of PF, it is mandatory for the employer to deduct PF, even if your basic salary is more than Rs. 6500/-.
Nitin
From India, Pune
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If any employee is drawing a basic salary of more than Rs. 6500/- and joining the PF scheme for the first time, then only he/she can choose to be exempt from PF deduction. Once you are a member of PF, it is mandatory for the employer to deduct PF, even if your basic salary is more than Rs. 6500/-.
Nitin
From India, Pune
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Dear Bhanu Pratap Singh,
Don't think about how to implement PF contributions forcefully. First, explain the benefits that employees receive from PF and also the benefits regarding Income Tax. Try to convince the employees.
I wish you all the best.
From India, Hyderabad
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Don't think about how to implement PF contributions forcefully. First, explain the benefits that employees receive from PF and also the benefits regarding Income Tax. Try to convince the employees.
I wish you all the best.
From India, Hyderabad
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Dear All,
As per the P.F. Act under section 2(b) and 6, any employee whose salary (Basic wages + Dearness Allowance + Retaining Allowance) is less than or equal to Rs. 6500/- per month, both the employer and employee contributions (12% Each) should be deposited in their respective Establishment P.F. Code.
If an employee's salary (Basic wages + Dearness Allowance + Retaining Allowance) exceeds Rs. 6500/- per month, there is no requirement to deduct P.F. contributions. It is optional. If the employee and employer both agree to contribute to the P.F., they can do so.
If the employer is deducting P.F. contributions forcefully, the employee should approach the HRD Manager or Admin Head. It is their responsibility to convince the management not to deduct forcefully, as it could lead to legal complications.
Deepak Raj
New Delhi
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As per the P.F. Act under section 2(b) and 6, any employee whose salary (Basic wages + Dearness Allowance + Retaining Allowance) is less than or equal to Rs. 6500/- per month, both the employer and employee contributions (12% Each) should be deposited in their respective Establishment P.F. Code.
If an employee's salary (Basic wages + Dearness Allowance + Retaining Allowance) exceeds Rs. 6500/- per month, there is no requirement to deduct P.F. contributions. It is optional. If the employee and employer both agree to contribute to the P.F., they can do so.
If the employer is deducting P.F. contributions forcefully, the employee should approach the HRD Manager or Admin Head. It is their responsibility to convince the management not to deduct forcefully, as it could lead to legal complications.
Deepak Raj
New Delhi
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Maximum salary limit is Rs. 6500/- as per the P.F. Act. If you earn more than that, P.F. amount will still be deducted based on Rs. 6500/- only. If the employer is willing to pay more than Rs. 6500/-, P.F. can still be deducted. All employees covered under P.F. are eligible for a pension, and in the event of any unfortunate circumstances, the family receives the pension for their survival. Income tax exemption, etc.
From India, Mumbai
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From India, Mumbai
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I would like to add that PF has three parts:
a) Provident Fund - In which the employee's 12% contribution + employer's 3.67% contribution goes.
b) Pension Scheme - In which the employer's 8.33% of contribution goes up to a maximum of Rs 541 per month (this can fetch a maximum pension of Rs 3250 on superannuation).
c) EDLI - which is made out of the employer's contribution only and provides insurance of Rs 65000 (some companies have taken EDLI Insurance with Life Insurers and provide coverage of up to Rs 1.25 lakhs).
Please note that all of these cannot be attached under any decree or order of any court.
To sum up:
1) PF provides a lump-sum tax-free kitty at the time of superannuation.
2) The returns are also risk-free as they are guaranteed by the government.
3) It provides monthly pension at the time of retirement (and family/widow pension in the unfortunate event of the passing away of the employee).
4) It also provides insurance.
5) Contribution to PF can also be claimed for IT deduction.
6) A member of PF can also seek advances as and when the need arises like during a child's education, marriage, etc.
I would strongly recommend that all your employees should join PF. It is an excellent step by your management for the welfare of employees.
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a) Provident Fund - In which the employee's 12% contribution + employer's 3.67% contribution goes.
b) Pension Scheme - In which the employer's 8.33% of contribution goes up to a maximum of Rs 541 per month (this can fetch a maximum pension of Rs 3250 on superannuation).
c) EDLI - which is made out of the employer's contribution only and provides insurance of Rs 65000 (some companies have taken EDLI Insurance with Life Insurers and provide coverage of up to Rs 1.25 lakhs).
Please note that all of these cannot be attached under any decree or order of any court.
To sum up:
1) PF provides a lump-sum tax-free kitty at the time of superannuation.
2) The returns are also risk-free as they are guaranteed by the government.
3) It provides monthly pension at the time of retirement (and family/widow pension in the unfortunate event of the passing away of the employee).
4) It also provides insurance.
5) Contribution to PF can also be claimed for IT deduction.
6) A member of PF can also seek advances as and when the need arises like during a child's education, marriage, etc.
I would strongly recommend that all your employees should join PF. It is an excellent step by your management for the welfare of employees.
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Legal Clarification on Termination for Criminal Case & PF Contribution Reduction.pdf