Dear All
I have 2 situations in regards to PF.
1) An old employee who had PF contribution, but withdrew it after discussing with MD. Her PF Basic was more than 6500 & so continues till date without PF. Current PF Basic is 9500.
2) An employee who joined in Dec 14 who never had contributed to PF & so has been continuing without PF till date. Current PF Basic is 4500.
Now as per revised PF norms, PF is mandatory for employees with PF basic less than 15000.
What should be the effect on above 2 employees?
Can we increase the PF Basic of 1st employee to 15000 which can solve the issue?
For 2nd employee, salary is less than 15000 anyway & never contributed to PF fund, so can the employee be exempted or should we start PF mandatory?
Please revert at the earliest.
Regards
Darshana
From India, Mumbai
25I have 2 situations in regards to PF.
1) An old employee who had PF contribution, but withdrew it after discussing with MD. Her PF Basic was more than 6500 & so continues till date without PF. Current PF Basic is 9500.
2) An employee who joined in Dec 14 who never had contributed to PF & so has been continuing without PF till date. Current PF Basic is 4500.
Now as per revised PF norms, PF is mandatory for employees with PF basic less than 15000.
What should be the effect on above 2 employees?
Can we increase the PF Basic of 1st employee to 15000 which can solve the issue?
For 2nd employee, salary is less than 15000 anyway & never contributed to PF fund, so can the employee be exempted or should we start PF mandatory?
Please revert at the earliest.
Regards
Darshana
From India, Mumbai
Both the employees are covered under the PF Act. by increasing the basic salary to Rs 15001, with retrospective effect (in the books also) you can exclude the first employee from PF. In the second case since the gross salary itself is less than Rs 15000, you cannot increase the basic pay to 15001. You have to contribute PF with effect from the date of joining, ie, Dec 2014. Also the delay will attract interest and damages.
Madhu.T.K
From India, Kannur
Madhu.T.K
From India, Kannur
Dear Sir Thank you for your response. Can we avoid the PF by taking Form 11 declaration for the 2nd employee since the employee has never contributed to PF before? Regards Darshana
From India, Mumbai
From India, Mumbai
I think the company you are in is involved in deliberate fraud.
In the first case, the employee has withdrawn his PF although Inn is still working and continues to work in the firm, and is not being is PF contribution anymore. This can happen only with the active participation of the management in fraud. In any investigation, the company will be required to pay the entire amount of unpaid statutory dues along with penalty. There would also be criminal prosecution of the management and the employee for deliberate false declaration
In the second case, there is a more talent violation of the law. It is very clear that under the world and the new law, the employee was subject to PF but it was not paid. The exemptions is only applicable for an employer you feel has started in the organised with the salary that is higher then the limit of Rs.15,000. Further the employee must not have contributed to PF before and must not have active PF account. Where is his salary does not exceed 15,000 anyway, where is the question of an examption.
Filling up of form 11 should be done carefully because any false the duration, specially where there is evidence that it has been Falls, is likely to get you into serious trouble.
From India, Mumbai
In the first case, the employee has withdrawn his PF although Inn is still working and continues to work in the firm, and is not being is PF contribution anymore. This can happen only with the active participation of the management in fraud. In any investigation, the company will be required to pay the entire amount of unpaid statutory dues along with penalty. There would also be criminal prosecution of the management and the employee for deliberate false declaration
In the second case, there is a more talent violation of the law. It is very clear that under the world and the new law, the employee was subject to PF but it was not paid. The exemptions is only applicable for an employer you feel has started in the organised with the salary that is higher then the limit of Rs.15,000. Further the employee must not have contributed to PF before and must not have active PF account. Where is his salary does not exceed 15,000 anyway, where is the question of an examption.
Filling up of form 11 should be done carefully because any false the duration, specially where there is evidence that it has been Falls, is likely to get you into serious trouble.
From India, Mumbai
As rightly said by Saswata,the exclusion by way of taking declaration in form 11 is available only to those whose PF qualifying salary are more than Rs 15000. In your case the employee is getting less than Rs 15000 and even if he has never been a PF member in the past he should be under PF cover in your organisation because his salary is less than Rs 15000. That means for excluding a new employee two conditions are required to be satisfied, first, his PF qualifying salary ( which may be basic salary or basic +Dearness allowance or even gross salary without HRA as proposed) should be more than Rs 15000 and second he should not have PF account in his previous employment or if he had PF in his previous employment, had withdrawn the accumulations before joining the present organisation.
Madhu.T.K
From India, Kannur
Madhu.T.K
From India, Kannur
Your questions appear to be tricky and fishy. You have not mentioned how many employees you have, are you registered with the EPFO, do you have a code number, how many employees you have etc. Without providing these basic info, it is not possible to answer you in a hypothetical manner.
From India, Mumbai
From India, Mumbai
Hi All,
And just thought of adding another point, once an employee is covered under EPF, he/she will be continued to be a member till his retirement or withdrawal irrespective his/her basic salary is increased to 15001 or not.
And enrolling the old employee with new number is always risky... please note the same employee after relieving (or settling PF) again should not be rejoined without sufficient period of break in service. Other wise that employee may again claim continuity of service which will be again a risk and liability to the organisation.
But the point is, as a HR person you should convince the management to cover all employees who have drawing salary less than 15000/- per month.
From India, Coimbatore
And just thought of adding another point, once an employee is covered under EPF, he/she will be continued to be a member till his retirement or withdrawal irrespective his/her basic salary is increased to 15001 or not.
And enrolling the old employee with new number is always risky... please note the same employee after relieving (or settling PF) again should not be rejoined without sufficient period of break in service. Other wise that employee may again claim continuity of service which will be again a risk and liability to the organisation.
But the point is, as a HR person you should convince the management to cover all employees who have drawing salary less than 15000/- per month.
From India, Coimbatore
Dear All
Thanks for your responses. The company that I work in is neither fraudulent & nor the management corrupt. We obviously have a PF number & cover about 1500 employees every month.
Regarding both the employees, they are office based n come from financially lower background. So for 1st employee after a few months of continuing PF, wanted to withdraw it coz wanted the amount in hand. Since then it was done as the basic of the employee was more than 6500. The mistake was it was overlooked after the sept 14 rule change. We are in the process of solving this issue.
Regarding 2nd employee, it was similar financial situation and the employee was to be with us for 3months on training, so we started with kind of stipend but continued later. We are making calculations for the missing months n contributing both shares for this employee.
Thanks all again for your views.
Regards
Darshana
From India, Mumbai
Thanks for your responses. The company that I work in is neither fraudulent & nor the management corrupt. We obviously have a PF number & cover about 1500 employees every month.
Regarding both the employees, they are office based n come from financially lower background. So for 1st employee after a few months of continuing PF, wanted to withdraw it coz wanted the amount in hand. Since then it was done as the basic of the employee was more than 6500. The mistake was it was overlooked after the sept 14 rule change. We are in the process of solving this issue.
Regarding 2nd employee, it was similar financial situation and the employee was to be with us for 3months on training, so we started with kind of stipend but continued later. We are making calculations for the missing months n contributing both shares for this employee.
Thanks all again for your views.
Regards
Darshana
From India, Mumbai
Darshana,
In the first case you have referred to, allowing any employee to withdraw the PF while still continuing to work is a fraud. It is a criminal liability for fraud by both the employer and the employee. You can not say your company did not know she had not actually resigned, when she came back to work the next day. You can't say you didn't know she was still employed with you when you signed the PF withdrawal form. You can't say form 11 was false when she was anyway working with you and you know her previous PF was still not withdrawal.
The employee wanted to commit fraud since she wanted the money. Actually I suspect your statement above is also fake. She did that because someone advised her that this way she gets the entire money and it does not go into pension fund. You allowed the fraud to be made because you wanted to save the money. Sorry, your excuses are only excuses. If the matter is investigated, you will have no defence.
Ofcourse, I am only making assumptions. May be your company is actually innocent. But I have seen too many such cases to believe it. I am sure you have other cases where it was done but they are currently working with salary of over ₹15000 so you are not considering them.
From India, Mumbai
In the first case you have referred to, allowing any employee to withdraw the PF while still continuing to work is a fraud. It is a criminal liability for fraud by both the employer and the employee. You can not say your company did not know she had not actually resigned, when she came back to work the next day. You can't say you didn't know she was still employed with you when you signed the PF withdrawal form. You can't say form 11 was false when she was anyway working with you and you know her previous PF was still not withdrawal.
The employee wanted to commit fraud since she wanted the money. Actually I suspect your statement above is also fake. She did that because someone advised her that this way she gets the entire money and it does not go into pension fund. You allowed the fraud to be made because you wanted to save the money. Sorry, your excuses are only excuses. If the matter is investigated, you will have no defence.
Ofcourse, I am only making assumptions. May be your company is actually innocent. But I have seen too many such cases to believe it. I am sure you have other cases where it was done but they are currently working with salary of over ₹15000 so you are not considering them.
From India, Mumbai
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