Dear All,
Can an employer change the Employer contribution of EPF in mid of the employment?
Example :- Earlier Basic+DA was 20000 and PF remitted from employer side was 20000*12% =2400 (1250 in EPS and remaining in PF).
After reffering wage ceiling judgement of Feb 2019 employer has started remitted contribution on 15000 Basic+DA (i.e. - 15000-12% = 1800 (1250 in EPS and 550 in PF) in mid of employment. Is it legally valid of not?
May please incorporate your valuable opinion on the matter.
From India, Jaipur
1Can an employer change the Employer contribution of EPF in mid of the employment?
Example :- Earlier Basic+DA was 20000 and PF remitted from employer side was 20000*12% =2400 (1250 in EPS and remaining in PF).
After reffering wage ceiling judgement of Feb 2019 employer has started remitted contribution on 15000 Basic+DA (i.e. - 15000-12% = 1800 (1250 in EPS and 550 in PF) in mid of employment. Is it legally valid of not?
May please incorporate your valuable opinion on the matter.
From India, Jaipur
Yes, the employer can reduce the PF qualifying salary from 20000 (or any amount) to Rs 15000. But the employer cannot reduce it further. In Maratwada Gramin Bank's case the Supreme Court of India has said that the EPFO cannot demand a contribution above the threshold limit fixed. Rs 15000 being the threshold ceiling to salary, the EPFO cannot demand a contribution on a salary above Rs 15000.
But in a scenario wherein the "CTC" for the year ahead is normally fixed in advance with a contribution payable by the employer as part of it, reducing the same without giving the employee anything to compensate it would be disputed and the same could be violation of ID Act. Unilateral decision of the employer to change the contribution can be challenged. Contribution is one of the conditions of service and changing it would require notice under section 9A of the Industrial Disputes Act.
From India, Kannur
But in a scenario wherein the "CTC" for the year ahead is normally fixed in advance with a contribution payable by the employer as part of it, reducing the same without giving the employee anything to compensate it would be disputed and the same could be violation of ID Act. Unilateral decision of the employer to change the contribution can be challenged. Contribution is one of the conditions of service and changing it would require notice under section 9A of the Industrial Disputes Act.
From India, Kannur
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