Dear all,
Hi,
My query is one of our contractors is not paying PF and says that the consolidated pay of his labor is more than 6500/- per month, whereby he says that he is going to show the same as Basic + DA. He asks me if there is any rule which states that he needs to compulsorily pay PF even if the basic + DA is more than 6500.
Kindly suggest and give me your valuable advice.
Waiting for your valuable replies.
Thanks & Regards,
Siva
From India, Hyderabad
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Hi,
My query is one of our contractors is not paying PF and says that the consolidated pay of his labor is more than 6500/- per month, whereby he says that he is going to show the same as Basic + DA. He asks me if there is any rule which states that he needs to compulsorily pay PF even if the basic + DA is more than 6500.
Kindly suggest and give me your valuable advice.
Waiting for your valuable replies.
Thanks & Regards,
Siva
From India, Hyderabad
Acknowledge(0)Amend(0)
Dear all,
Hi,
My query is: One of our contractors is not paying PF and says that the consolidated pay of his labor is more than 6500/- per month, whereby he claims that he is going to show the same as Basic + DA. He asks me if there is any rule that states he needs to compulsorily pay PF even if the basic + DA is more than 6500.
Kindly suggest and provide me with your valuable advice.
Waiting for your valuable replies.
Thanks & Regards,
Siva
For more information, visit http://citehr.com#ixzz15X9Ip2Qt
From India, Hyderabad
Acknowledge(0)Amend(0)
Hi,
My query is: One of our contractors is not paying PF and says that the consolidated pay of his labor is more than 6500/- per month, whereby he claims that he is going to show the same as Basic + DA. He asks me if there is any rule that states he needs to compulsorily pay PF even if the basic + DA is more than 6500.
Kindly suggest and provide me with your valuable advice.
Waiting for your valuable replies.
Thanks & Regards,
Siva
For more information, visit http://citehr.com#ixzz15X9Ip2Qt
From India, Hyderabad
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Dear Siva,
As per my understanding, it is not only the 6,500 threshold limit that restricts the contractor from paying the PF contribution. There are other conditions as well that should be met, and the Employer/Contractor should submit a letter to the PF department stating that all his employees have a Basic + DA of more than 6,500 and hence will not be covered for PF contribution. Regardless of the threshold limit, if the company has exceeded 20 employees, they should register for PF.
Regarding the other two conditions, they are as follows:
1. An employee should not have been a member of PF at any time during their previous employment.
2. An employee should have withdrawn all their previous PF accumulations, if any.
Please verify with the PF department if you are unsure about the above.
Thanks
From India, Faridabad
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9As per my understanding, it is not only the 6,500 threshold limit that restricts the contractor from paying the PF contribution. There are other conditions as well that should be met, and the Employer/Contractor should submit a letter to the PF department stating that all his employees have a Basic + DA of more than 6,500 and hence will not be covered for PF contribution. Regardless of the threshold limit, if the company has exceeded 20 employees, they should register for PF.
Regarding the other two conditions, they are as follows:
1. An employee should not have been a member of PF at any time during their previous employment.
2. An employee should have withdrawn all their previous PF accumulations, if any.
Please verify with the PF department if you are unsure about the above.
Thanks
From India, Faridabad
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Dear Sir,
Thank you for your immediate reply. The issue at hand is that the contractor has numerous contract laborers and is supplying labor to three plants where he is remitting PF & ESI. However, this is a new plant that commenced production in October 2010. It seems that the contractor is attempting to avoid PF payments. While he has paid ESI, he is trying to evade PF payments by claiming that even the contract laborers are not interested in PF. Kindly provide me with advice on how to proceed.
Thank you,
Siva
From India, Hyderabad
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Thank you for your immediate reply. The issue at hand is that the contractor has numerous contract laborers and is supplying labor to three plants where he is remitting PF & ESI. However, this is a new plant that commenced production in October 2010. It seems that the contractor is attempting to avoid PF payments. While he has paid ESI, he is trying to evade PF payments by claiming that even the contract laborers are not interested in PF. Kindly provide me with advice on how to proceed.
Thank you,
Siva
From India, Hyderabad
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Dear Siva,
Firstly, please request the contractor to provide the PF registration number. If the employment of his laborers is under the same registration, he should collect a Form 11, which is a declaration given by the employee stating that their salary is more than $6,500 and, therefore, they do not wish to contribute to the PF. The form should also state that the employee does not hold any previous PF number from any organization.
This Form 11 must be submitted to the PF department. Only then can you confidently state that the laborers are not covered under the PF, and as a result, there is no need for PF remittance. Otherwise, you may be exposed to PF compliance issues since you are the principal employer for the contract laborers.
Thanks
From India, Faridabad
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Firstly, please request the contractor to provide the PF registration number. If the employment of his laborers is under the same registration, he should collect a Form 11, which is a declaration given by the employee stating that their salary is more than $6,500 and, therefore, they do not wish to contribute to the PF. The form should also state that the employee does not hold any previous PF number from any organization.
This Form 11 must be submitted to the PF department. Only then can you confidently state that the laborers are not covered under the PF, and as a result, there is no need for PF remittance. Otherwise, you may be exposed to PF compliance issues since you are the principal employer for the contract laborers.
Thanks
From India, Faridabad
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Dear Siva,
Firstly, please request the contractor to provide the PF registration number. If the employment of his laborers is under the same registration, he should collect a Form 11, which is a declaration given by the employee stating that their salary is more than 6,500 and hence they do not want to contribute to the PF. It should also state that they do not hold any previous PF number in any organization.
This Form 11 has to be submitted to the PF department. Only then can you take the stand that they are not covered under PF, and hence there is no need for PF remittance. Otherwise, you will have exposure to PF compliance since you are the Principal Employer for the contract laborers.
Thanks,
Showri
+91-99001-03820
More at https://www.citehr.com/296469-contra...#ixzz15XS5mc5y
From India, Hyderabad
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Firstly, please request the contractor to provide the PF registration number. If the employment of his laborers is under the same registration, he should collect a Form 11, which is a declaration given by the employee stating that their salary is more than 6,500 and hence they do not want to contribute to the PF. It should also state that they do not hold any previous PF number in any organization.
This Form 11 has to be submitted to the PF department. Only then can you take the stand that they are not covered under PF, and hence there is no need for PF remittance. Otherwise, you will have exposure to PF compliance since you are the Principal Employer for the contract laborers.
Thanks,
Showri
+91-99001-03820
More at https://www.citehr.com/296469-contra...#ixzz15XS5mc5y
From India, Hyderabad
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Dear Sir, If all the contract labour are newly joined (Freshers) then what should be done Kindly advise Regards, Vijaya
From India, Hyderabad
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From India, Hyderabad
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If the contract labor has newly joined, then the same Form 11 will be applicable. They should mark the option stating that they were not a member of PF earlier. Subsequently, the same form should be submitted to the PF office if their salary is more than 6500.
From India, Angul
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From India, Angul
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If an employee is not covered earlier under the PF Act but draws a salary of more than 6500, including Basic + DA, he is not amenable under the PF Act, and the employer/contractor is not legally bound to contribute to PF. However, this will differ when an employee was earlier covered under the PF Act, and by virtue of a salary increase, he crosses the limit of Rs. 6500; he is bound to be covered under the PF Act irrespective of his present salary.
With regards,
Sanagapalli
From India, Hyderabad
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With regards,
Sanagapalli
From India, Hyderabad
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Dear Mr. Siva and others,
Please note:
1. You have indicated that the consolidated salary is Rs. 6500/-
2. PF is payable not on the consolidated salary but on basic+DA
3. If Basic + DA is more than Rs. 6500, there is an option not to pay PF and follow the procedure of filling form 11
4. If your company is paying PF to the contractor as per your agreement, then invariably he has to remit it to PF and cover his employees; otherwise, all this amount will go to his profit pocket!
5. If the basic + DA is less than Rs. 6500, immediately ask him to cover all his employees under PF and pay the contribution; otherwise, your company is liable to pay
6. Also, as other respondents say, if he had covered his employees earlier and is not doing so now, it is illegal, and he has to cover them.
Please take suitable action based on the above.
Regards,
K. Ramachandra
Bangalore
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Please note:
1. You have indicated that the consolidated salary is Rs. 6500/-
2. PF is payable not on the consolidated salary but on basic+DA
3. If Basic + DA is more than Rs. 6500, there is an option not to pay PF and follow the procedure of filling form 11
4. If your company is paying PF to the contractor as per your agreement, then invariably he has to remit it to PF and cover his employees; otherwise, all this amount will go to his profit pocket!
5. If the basic + DA is less than Rs. 6500, immediately ask him to cover all his employees under PF and pay the contribution; otherwise, your company is liable to pay
6. Also, as other respondents say, if he had covered his employees earlier and is not doing so now, it is illegal, and he has to cover them.
Please take suitable action based on the above.
Regards,
K. Ramachandra
Bangalore
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