Provident Fund (PF) Contribution During Off-Season for Seasonal Factories
How is the Provident Fund (PF) contribution handled during the off-season for a seasonal factory? Specifically:
1. Is the PF contribution calculated during the PF season based on the retention allowance?
2. Is the Nile ECR filed during the off-season?
3. If employees leave the organization during the off-season and do not return, are they still entitled to the retention allowance?
4. How is the retention allowance paid to these employees who do not return?
From India, Mumbai
Acknowledge(0)
Amend(0)
How is the Provident Fund (PF) contribution handled during the off-season for a seasonal factory? Specifically:
1. Is the PF contribution calculated during the PF season based on the retention allowance?
2. Is the Nile ECR filed during the off-season?
3. If employees leave the organization during the off-season and do not return, are they still entitled to the retention allowance?
4. How is the retention allowance paid to these employees who do not return?
From India, Mumbai
Acknowledge(0)Amend(0)
During the off-season, you may or may not engage workers. It is not necessary that all the workers will be off work, but you will employ some workers for tasks related to maintenance, etc. Obviously, you will be paying wages to them also, and PF will be deducted from those wages. At the same time, you will be retaining some workers by paying a retaining allowance, which will also qualify for PF. Therefore, like any other month, you have to generate ECR and remit the PF amounts.
In case there are no wages or retaining allowances paid during a year, you can file a NIL return.
If any employee who is paid a retaining allowance resigns, you can stop paying the retaining allowance. Retaining allowance is an amount paid so that when operations resume, the employee should be available for employment. Naturally, if he leaves before that, you should also stop paying the retaining allowance.
Why should you pay a retaining allowance if the employee is not expected to return to work when the season comes?
Paying a retaining allowance is not a legal obligation but an arrangement to retain certain skills needed when production resumes. In a continuous industry or an industry that is not seasonal, in case of an operation disruption due to raw material shortage, the company can declare a layoff, and affected workers shall be paid layoff wages at 50% of their wages. However, the right to layoff wages is limited to 45 days. The provisions regarding layoff do not apply to seasonal or intermittently operating establishments. Therefore, compensation like layoff compensation is not applicable in seasonal establishments. If the employer believes certain employees must return to work when the season starts, they should be paid an amount so they can be retained. This payment is made only if the employer is convinced the employee will return to work when the season starts. If the employer believes that despite paying a retaining allowance, the worker will not return to work, there is no need to pay this allowance.
From India, Kannur
Acknowledge(0)Amend(0)
4526In case there are no wages or retaining allowances paid during a year, you can file a NIL return.
If any employee who is paid a retaining allowance resigns, you can stop paying the retaining allowance. Retaining allowance is an amount paid so that when operations resume, the employee should be available for employment. Naturally, if he leaves before that, you should also stop paying the retaining allowance.
Why should you pay a retaining allowance if the employee is not expected to return to work when the season comes?
Paying a retaining allowance is not a legal obligation but an arrangement to retain certain skills needed when production resumes. In a continuous industry or an industry that is not seasonal, in case of an operation disruption due to raw material shortage, the company can declare a layoff, and affected workers shall be paid layoff wages at 50% of their wages. However, the right to layoff wages is limited to 45 days. The provisions regarding layoff do not apply to seasonal or intermittently operating establishments. Therefore, compensation like layoff compensation is not applicable in seasonal establishments. If the employer believes certain employees must return to work when the season starts, they should be paid an amount so they can be retained. This payment is made only if the employer is convinced the employee will return to work when the season starts. If the employer believes that despite paying a retaining allowance, the worker will not return to work, there is no need to pay this allowance.
From India, Kannur
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.
Provident fund.zip
PROVIDENT FUND.rar
PROVIDENT FUND.doc