Hi Members,
I wanted to clarify one of the doubts I have on PF. I heard from some sources that if all the employees of a company sign a declaration stating that they do not want to opt for the PF facility, the organization can opt out of registering for PF. Please clarify whether this is accepted as per the law. Thank you.
From India, Hyderabad
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2I wanted to clarify one of the doubts I have on PF. I heard from some sources that if all the employees of a company sign a declaration stating that they do not want to opt for the PF facility, the organization can opt out of registering for PF. Please clarify whether this is accepted as per the law. Thank you.
From India, Hyderabad
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no such provision is mentioned in PF Act. U may find some organization that even though Leave encashment is compulsory as per factory act, they don’t pay in F & F settlement.
From India, Ahmadabad
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From India, Ahmadabad
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Dear Rehbar,
My answer to you is as follows:
What you heard is wrong.
The EPF Act is applicable to establishments with a total headcount of 20 or more, regardless of salary and whether or not the individuals have opted for EPF.
A person who is already a member of EPF cannot choose not to contribute towards EPF. A person who is not a member of EPF and whose salary at joining is more than Rs. 6500/- can choose not to contribute towards EPF at the time of joining by providing a declaration to this effect.
If all individuals in your establishment are earning more than Rs. 6500/- at the time of joining or when the establishment is covered under EPF, and they were not members of EPF previously, they can choose not to contribute towards EPF. In this scenario, none of the individuals in your establishment are required to be covered under EPF. However, you are still liable to obtain an EPF code number for your establishment and pay a total of Rs. 7/- every month towards administration charges for EPF and EDLI.
I hope this clears up any doubts you may have.
I would appreciate it if other members could provide additional value to this information.
From India, Mumbai
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My answer to you is as follows:
What you heard is wrong.
The EPF Act is applicable to establishments with a total headcount of 20 or more, regardless of salary and whether or not the individuals have opted for EPF.
A person who is already a member of EPF cannot choose not to contribute towards EPF. A person who is not a member of EPF and whose salary at joining is more than Rs. 6500/- can choose not to contribute towards EPF at the time of joining by providing a declaration to this effect.
If all individuals in your establishment are earning more than Rs. 6500/- at the time of joining or when the establishment is covered under EPF, and they were not members of EPF previously, they can choose not to contribute towards EPF. In this scenario, none of the individuals in your establishment are required to be covered under EPF. However, you are still liable to obtain an EPF code number for your establishment and pay a total of Rs. 7/- every month towards administration charges for EPF and EDLI.
I hope this clears up any doubts you may have.
I would appreciate it if other members could provide additional value to this information.
From India, Mumbai
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(Fact Checked)-The user reply is correct. (1 Acknowledge point)
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Good reply Korgaonkar JI! If a sample declaration is attached, it will be highly helpful to such seekers. I am attaching a sample on behalf of you
From India, Madras
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From India, Madras
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(Fact Check Failed/Partial)-The information provided is incorrect. Under the EPF Act, if an establishment has 20 or more employees, it must register for PF regardless of employee preferences.
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Thanks, Learned Members,
Mr. Korgaonkar, please validate my understanding:
1. The company needs to get EPF code (once 20 employees are on rolls).
2. Even though there are 20 or more employees on the payroll, they can opt out of PF contribution if their salary is above Rs. 6500 (of course, they are not covered earlier or did not get enrolled in their previous organizations, kind of fresher).
3. An employee (fresher or earlier enrolled employee) drawing less than Rs. 6500 will be compulsorily covered in PF.
Please provide feedback.
From India, Hyderabad
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Mr. Korgaonkar, please validate my understanding:
1. The company needs to get EPF code (once 20 employees are on rolls).
2. Even though there are 20 or more employees on the payroll, they can opt out of PF contribution if their salary is above Rs. 6500 (of course, they are not covered earlier or did not get enrolled in their previous organizations, kind of fresher).
3. An employee (fresher or earlier enrolled employee) drawing less than Rs. 6500 will be compulsorily covered in PF.
Please provide feedback.
From India, Hyderabad
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(Fact Check Failed/Partial)-The information provided is partially correct. Here are the corrections: 1. A company needs to get EPF code once it has 20 or more employees. 2. Employees with a salary above Rs. 15,000 can opt out of PF contribution if they choose. 3. Employees earning less than Rs. 15,000 must be compulsorily covered under PF. Thank you for sharing your insights.
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Dear Rehbar,
As per the PF Act, the act is applicable from the day on which 20 persons are found working in your premises or on the roll. The other things start later, such as if all are getting above 6500, then you need to deposit just Rs. 7 (5 in the account, 2 and 2 in 22). Thirdly, if a new employee earns below 6500, you have to deduct and deposit his contribution along with the employer's share as per the law.
Thanks
From India, New Delhi
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As per the PF Act, the act is applicable from the day on which 20 persons are found working in your premises or on the roll. The other things start later, such as if all are getting above 6500, then you need to deposit just Rs. 7 (5 in the account, 2 and 2 in 22). Thirdly, if a new employee earns below 6500, you have to deduct and deposit his contribution along with the employer's share as per the law.
Thanks
From India, New Delhi
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(Fact Check Failed/Partial)-[The user's reply contains inaccuracies regarding the application of the PF Act and the contribution rules. The PF Act applies once a company has 20 or more employees, not necessarily from day one. The contribution amounts and rules are also not accurately described. Employers and employees have specific contribution percentages based on their wages. It's crucial to follow the PF Act guidelines accurately.]
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Dear Ramachandran ji,
I have made certain changes to your draft. Presently, not being a member of EPF is an essential criterion for becoming an 'excluded employee' within the meaning of the Act. The revised draft is attached.
Best regards, [Your Name]
From India, Mumbai
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I have made certain changes to your draft. Presently, not being a member of EPF is an essential criterion for becoming an 'excluded employee' within the meaning of the Act. The revised draft is attached.
Best regards, [Your Name]
From India, Mumbai
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(Fact Check Failed/Partial)-The user's reply is incorrect. The criteria for opting out of the EPF is not just being a non-member; there are specific conditions outlined in the law that must be met. Please refer to the EPF Act for accurate information.
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Dear Experts, Can u please tell me what is salary as per PF act. Is it BASIC + DA IS LESS THAN 6500 OR ONLY BASIC IS LESS 6500....? RGDS MAHAN
From India, Mumbai
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From India, Mumbai
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(Fact Checked)-The salary considered under the PF Act is Basic + DA if it is less than Rs. 6,500. It's not just Basic alone. Please refer to the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 for detailed information. (1 Acknowledge point)
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I would suggest that you may take Form 11 from the employees who join your company at a salary (PF qualifying salary which shall include basic and DA only) of more than 6500 so as to make them excluded. The Form 11 is attached for your reference.
Madhu.T.K
From India, Kannur
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Madhu.T.K
From India, Kannur
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(Fact Check Failed/Partial)-The information provided is incorrect. As per the EPF Act, an organization cannot opt out of registering for PF even if all employees declare they do not want to opt for it.
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(Fact Checked)-The user's reply is correct. (1 Acknowledge point)