Hi, my company is registered in EPF. However, when we hire a new employee whose salary is above 15000/-, we do not count them in PF deduction as per the rule. My question is, "Is it necessary to provide PF benefits to a new employee if we offer them a salary above 15000/-, and they are already a member of EPF (receiving PF benefits from a previous employer)? Are we obligated to provide them with PF benefits?"
From India, Delhi
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30From India, Delhi
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Employer Obligations Regarding EPF Contributions
An employer cannot bar any employee from joining the EPF. However, the employer can restrict their contributions up to the ceiling of ₹15,000 (employer contribution ₹1,800). The employer must always offer and ask the employee to be a member of the EPFO. If the employee has never been a member of the EPFO in their past service and their present salary is above the ceiling limit of ₹15,000, they must inform the employer in writing that they have never been a member of the EPFO and do not want to participate.
Starting from December 2016, EPFO has begun collecting data on such employees during ECR submission. In case of any non-compliance, the employer would be fully liable for both shares of contributions, plus interest and penal damages.
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An employer cannot bar any employee from joining the EPF. However, the employer can restrict their contributions up to the ceiling of ₹15,000 (employer contribution ₹1,800). The employer must always offer and ask the employee to be a member of the EPFO. If the employee has never been a member of the EPFO in their past service and their present salary is above the ceiling limit of ₹15,000, they must inform the employer in writing that they have never been a member of the EPFO and do not want to participate.
Starting from December 2016, EPFO has begun collecting data on such employees during ECR submission. In case of any non-compliance, the employer would be fully liable for both shares of contributions, plus interest and penal damages.
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@ U S Sharma so is it necessary for us to give PF benefit to employee who is earning above 15000/- (if he was getting PF benefit from his previous employer)
From India, Delhi
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From India, Delhi
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Employers have to offer EPF benefits to all employees, whether they were previously EPF members or not. If the member had been an EPF contributor at any time in the past, then he must join. Employers have no right to restrict any employee from joining EPF; they can only restrict their own contributions.
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Irrespective of previously being an EPF member, if the employee is an active member of EPF at the time of joining a new organization, then the new employer shall be bound to cover him/her within the purview of EPF. However, if the employee had been a previous member of EPF but at the time of joining the new organization, he/she is not an active member of EPF, in this scenario, the employer shall not be bound to cover him under EPF if the PF chargeable salary exceeds the ceiling limit, i.e., 15K. For the employee who is not an active member of EPF and also drawing basic plus DA exceeding 15K, you can convince them not to be a member of EPF. If they agree, just obtain Form 11 duly signed by the concerned employees not agreeing to the same, and keep these forms for further reference.
Thanks & Regards,
V. SHAKYA
HR & Labour Laws Advisor
From India, Agra
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Thanks & Regards,
V. SHAKYA
HR & Labour Laws Advisor
From India, Agra
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Dear All, In PF what is 15k ceiling, is it basic,gross or inhand salary.
From India, New Delhi
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From India, New Delhi
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Query on EPF Membership for New Employees
Hi, my company is registered with EPF. However, when we hire a new employee whose salary is above ₹15,000, we don't include them in PF deductions as per the rule. My question is, "Is it necessary to provide PF benefits to a new employee if we offer them a salary above ₹15,000 and they are already an EPF member (receiving PF benefits from a previous employer)? Are we obligated to provide them with PF benefits?"
Answer
If the member has previous employer membership, you must continue them as an EPF member and restrict their PF wages to ₹15,000. If the member has no PF membership or has withdrawn their PF, and they join an organization where PF is applicable, if their salary at the time of joining is above ₹15,000, they can be treated as an excluded employee. Even if you want to provide them with PF benefits, they will only be a member of EPF, and no EPS will be deducted.
Thanks,
Vidyadhar Bhat
From India, Pune
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Hi, my company is registered with EPF. However, when we hire a new employee whose salary is above ₹15,000, we don't include them in PF deductions as per the rule. My question is, "Is it necessary to provide PF benefits to a new employee if we offer them a salary above ₹15,000 and they are already an EPF member (receiving PF benefits from a previous employer)? Are we obligated to provide them with PF benefits?"
Answer
If the member has previous employer membership, you must continue them as an EPF member and restrict their PF wages to ₹15,000. If the member has no PF membership or has withdrawn their PF, and they join an organization where PF is applicable, if their salary at the time of joining is above ₹15,000, they can be treated as an excluded employee. Even if you want to provide them with PF benefits, they will only be a member of EPF, and no EPS will be deducted.
Thanks,
Vidyadhar Bhat
From India, Pune
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Pl note that Salary means PF wages above Rs 15 K. Thanks, Vidyadhar Bhat
From India, Pune
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From India, Pune
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Eligibility for EPF and EPS for New Employees
1. If a member is newly joined and their EPF wages exceed ₹15,000, they are not eligible for EPS. However, EPF contributions must still be made.
2. If a member was already an EPF member in a previous organization and has not withdrawn or claimed for settlement, you should first link their UAN and check their previous company's wage limit. If it does not exceed ₹15,000, they are eligible for both EPF and EPS.
3. If a member was already an EPF member in a previous organization and has not withdrawn or claimed for settlement, you should first link their UAN and check their previous company's wage limit. If it exceeds ₹15,000, they are not eligible for either EPF or EPS.
This is what I am aware of. Please correct me if I am wrong.
From India, Bengaluru
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1. If a member is newly joined and their EPF wages exceed ₹15,000, they are not eligible for EPS. However, EPF contributions must still be made.
2. If a member was already an EPF member in a previous organization and has not withdrawn or claimed for settlement, you should first link their UAN and check their previous company's wage limit. If it does not exceed ₹15,000, they are eligible for both EPF and EPS.
3. If a member was already an EPF member in a previous organization and has not withdrawn or claimed for settlement, you should first link their UAN and check their previous company's wage limit. If it exceeds ₹15,000, they are not eligible for either EPF or EPS.
This is what I am aware of. Please correct me if I am wrong.
From India, Bengaluru
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Dear All,
The excluded employee is not necessary to join the EPF Scheme. An excluded employee is defined as follows:
1. A member who has withdrawn the PF.
2. An employee whose PF wages exceed 15K at the time of joining.
If the employee is already a member of EPF, you are required to continue his membership by adding him to your establishment in PF. This is not optional.
Thanks,
Vidyadhar Bhat
From India, Pune
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The excluded employee is not necessary to join the EPF Scheme. An excluded employee is defined as follows:
1. A member who has withdrawn the PF.
2. An employee whose PF wages exceed 15K at the time of joining.
If the employee is already a member of EPF, you are required to continue his membership by adding him to your establishment in PF. This is not optional.
Thanks,
Vidyadhar Bhat
From India, Pune
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