I have recently joined an organization that does not cover employees above the Basic pay of 6500 under the PF Act. I am planning to cover all employees under the PF Act with contributions limited to 780 towards PF, regardless of the Basic pay if it exceeds 6500.
Query on PF Contribution Adjustment
My query is regarding an employee who is already a member of the PF and has an actual Basic pay of 10000, on which the company is currently contributing 12% of Basic, i.e., 1200. In this case, can the company reduce the contribution to 780, which is the minimum required?
Looking forward to guidance.
From India, Mumbai
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1Query on PF Contribution Adjustment
My query is regarding an employee who is already a member of the PF and has an actual Basic pay of 10000, on which the company is currently contributing 12% of Basic, i.e., 1200. In this case, can the company reduce the contribution to 780, which is the minimum required?
Looking forward to guidance.
From India, Mumbai
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EPF Contribution Adjustment
You can do so. When an employer is deducting and depositing EPF on more than Rs 6500, they can later reduce it to the required percentage (i.e., 12%) on Rs 6500. In that event, section 12 of the EPF Act, which provides a bar on reducing wages, will not apply. This has been held in the Supreme Court case, Marathwada Gramin Bank Karmachari Sanghatana and another vs. Management of Marathwada Gramin Bank and others (SC 2011 LLR 1130).
Regards,
Madhu.T.K
From India, Kannur
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You can do so. When an employer is deducting and depositing EPF on more than Rs 6500, they can later reduce it to the required percentage (i.e., 12%) on Rs 6500. In that event, section 12 of the EPF Act, which provides a bar on reducing wages, will not apply. This has been held in the Supreme Court case, Marathwada Gramin Bank Karmachari Sanghatana and another vs. Management of Marathwada Gramin Bank and others (SC 2011 LLR 1130).
Regards,
Madhu.T.K
From India, Kannur
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EPF-Circular-da ted-23-May-2011 -Splitting-of-M inimum-Wages-fo r-the-Purpose-o f-PF-Contributi on-Not.pdf