As a new circular has been circulated regarding an increase in the standard PF amount from Rs. 780 to Rs. 1800, can anyone help me with the below questions:
1. Can an existing employee opt out of PF if they are not interested in the heavy deduction?
2. If an existing employee opts out of PF, will there be any impact on the organization?
3. For new joiners, do they have the option to opt out of PF, or is PF mandatory?
From India, Hyderabad
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11. Can an existing employee opt out of PF if they are not interested in the heavy deduction?
2. If an existing employee opts out of PF, will there be any impact on the organization?
3. For new joiners, do they have the option to opt out of PF, or is PF mandatory?
From India, Hyderabad
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Responses for your queries:
1) Purpose of Increasing the PF Wage Limit
The main purpose of increasing the PF wage limit is to provide more coverage for PF accounts and to enable more savings. In this scenario, no existing EPF member can opt out of EPF coverage. Even if an employee's wages are above ₹15,000 and they are already a contributing member, they must continue their contributions.
2) Impact of Opting Out of PF Contributions
Yes, as per the PF notification, existing employees cannot opt out of PF contributions. If they do decide to quit, whenever an inspection occurs, EPF Enforcement officers will charge both the employer and employee contributions, along with interest and penalties.
3) PF Contribution for New Employees
If a new employee has a basic salary of less than ₹15,000, PF contribution is mandatory. If the new employee's salary is above ₹15,000 and they had an EPF account in a previous organization, they will only become a coverable member.
Please let me know if you need further clarification or assistance.
From India, Bangalore
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1) Purpose of Increasing the PF Wage Limit
The main purpose of increasing the PF wage limit is to provide more coverage for PF accounts and to enable more savings. In this scenario, no existing EPF member can opt out of EPF coverage. Even if an employee's wages are above ₹15,000 and they are already a contributing member, they must continue their contributions.
2) Impact of Opting Out of PF Contributions
Yes, as per the PF notification, existing employees cannot opt out of PF contributions. If they do decide to quit, whenever an inspection occurs, EPF Enforcement officers will charge both the employer and employee contributions, along with interest and penalties.
3) PF Contribution for New Employees
If a new employee has a basic salary of less than ₹15,000, PF contribution is mandatory. If the new employee's salary is above ₹15,000 and they had an EPF account in a previous organization, they will only become a coverable member.
Please let me know if you need further clarification or assistance.
From India, Bangalore
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Provident Fund (PF) Guidelines
PF is a social security benefit provided by the employer. Every employee should opt for it. In central government and PSU, it is compulsory. However, in some private organizations, they can change it as per their wish and will.
Regarding Your Query:
1. No, if an employee is already a member, they cannot quit. It is the duty of HR personnel to counsel the employee.
2. Yes, if there is an inspection, you may be charged to pay both, including interest and damage charges.
3. For a new joiner, yes, if their basic pay is more than Rs 15,000. However, if they are already a member and join a new organization after resignation, then in that case, they cannot opt out.
Please let me know if you need any further clarification.
Regards,
Pranab Chakraborty
[Phone Number Removed For Privacy Reasons]
From India, Mumbai
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PF is a social security benefit provided by the employer. Every employee should opt for it. In central government and PSU, it is compulsory. However, in some private organizations, they can change it as per their wish and will.
Regarding Your Query:
1. No, if an employee is already a member, they cannot quit. It is the duty of HR personnel to counsel the employee.
2. Yes, if there is an inspection, you may be charged to pay both, including interest and damage charges.
3. For a new joiner, yes, if their basic pay is more than Rs 15,000. However, if they are already a member and join a new organization after resignation, then in that case, they cannot opt out.
Please let me know if you need any further clarification.
Regards,
Pranab Chakraborty
[Phone Number Removed For Privacy Reasons]
From India, Mumbai
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PF Judgement - Bom HC - Temp employee.doc