R/Sir,
If the employee cross the stiputlated age mentioned in his appointment letter and if company is in the interest to retain him then as per my openion he can be retained on retainership basis.A seperate agreement should be made at the same time and his services may be hired on consultancy basis.On which only T.D.S. will deduct @ 10% .No PF or ESI.
If any thing more,sir please suggest.
From India, Pune
7If the employee cross the stiputlated age mentioned in his appointment letter and if company is in the interest to retain him then as per my openion he can be retained on retainership basis.A seperate agreement should be made at the same time and his services may be hired on consultancy basis.On which only T.D.S. will deduct @ 10% .No PF or ESI.
If any thing more,sir please suggest.
From India, Pune
PL SEE THE MATTER HANDLED BY ME IN TH PAST
MD/Approval /16 - 2007
Sub : Retirement Age.
1. Present Status
At present, appointment letter of each employee indicates age of retirement as 58 years.
For employees who were in the union cadre transferred from XXXX, it is 60 years .
Incase of XXXXXXDivision and now XXXXX., the clause reads as under :
“The normal Retirement age is 58 years in the Company. However, subject to your health being satisfactory and level of performance upto the Company’s expectation, this can be extended to 60 years at the sole discretion and judgment of the Company.”
2. Legal Background
The Shops and Establishments Act under which our Company is registered with local Authorities do not prescribe retirement age but prescribes punishment for employing a person who is under or over certain age.
Under the said Act, it is prescribed that Industrial Employment (Standing Orders) Act, 1946, is applicable to all establishments registered under Shops and Establishment Act in which 50 or more employees are employed as if they were Industrial Establishments within the meaning of the said Act.
As per the Industrial Employment (Standing Orders) Act, 1946 and Rules issued by the Central Government there under indicate that
The age of retirement or superannuation of an employee shall be as may be agreed upon between the employer and employee under an agreement or as specified in a settlement or award which is binding on both the employee and the employer. Where there is no such agreed age, retirement or superannuation shall be on completion of 60 years of age by the employee.
3. Current scenario
XXXXXwere appointed as consultants after their retirement at the age of 58 years and 60 years respectively.
However, in the program attended by Contract employees in BCCI, it is noted that
a. Continuation of employee as a consultant tantamount to employment with all its liabilities and obligations for the employer.
b. Detailed letter giving attendance requirement, leave, timings and the very fact that they are discharging their duties in the Company’s premises is questionable by PF , Shops & Establishment, Service Tax and Income Tax Authorities.
c. No differentiation be made in contract of employment between employees in grades.
4. Suggestions
Company to amend this clause for all existing employment contracts and include in new appointment contracts which will enable Company to continue services of the employees, if required without going through contractual route.
It will also not expose the company to any legal liabilities .
Submitted for your approval.
Regards
XXXX
Ps. : Retirement age of Director is governed by the same rules applicable to all employees
i.e. 58 years as of now or 60 years if changed as suggested in the memo.
From India, Mumbai
MD/Approval /16 - 2007
Sub : Retirement Age.
1. Present Status
At present, appointment letter of each employee indicates age of retirement as 58 years.
For employees who were in the union cadre transferred from XXXX, it is 60 years .
Incase of XXXXXXDivision and now XXXXX., the clause reads as under :
“The normal Retirement age is 58 years in the Company. However, subject to your health being satisfactory and level of performance upto the Company’s expectation, this can be extended to 60 years at the sole discretion and judgment of the Company.”
2. Legal Background
The Shops and Establishments Act under which our Company is registered with local Authorities do not prescribe retirement age but prescribes punishment for employing a person who is under or over certain age.
Under the said Act, it is prescribed that Industrial Employment (Standing Orders) Act, 1946, is applicable to all establishments registered under Shops and Establishment Act in which 50 or more employees are employed as if they were Industrial Establishments within the meaning of the said Act.
As per the Industrial Employment (Standing Orders) Act, 1946 and Rules issued by the Central Government there under indicate that
The age of retirement or superannuation of an employee shall be as may be agreed upon between the employer and employee under an agreement or as specified in a settlement or award which is binding on both the employee and the employer. Where there is no such agreed age, retirement or superannuation shall be on completion of 60 years of age by the employee.
3. Current scenario
XXXXXwere appointed as consultants after their retirement at the age of 58 years and 60 years respectively.
However, in the program attended by Contract employees in BCCI, it is noted that
a. Continuation of employee as a consultant tantamount to employment with all its liabilities and obligations for the employer.
b. Detailed letter giving attendance requirement, leave, timings and the very fact that they are discharging their duties in the Company’s premises is questionable by PF , Shops & Establishment, Service Tax and Income Tax Authorities.
c. No differentiation be made in contract of employment between employees in grades.
4. Suggestions
Company to amend this clause for all existing employment contracts and include in new appointment contracts which will enable Company to continue services of the employees, if required without going through contractual route.
It will also not expose the company to any legal liabilities .
Submitted for your approval.
Regards
XXXX
Ps. : Retirement age of Director is governed by the same rules applicable to all employees
i.e. 58 years as of now or 60 years if changed as suggested in the memo.
From India, Mumbai
Dear Shweta,
Greetings for the day,
Yes if anyone completed the age of 60 yrs. he must be in payroll as far as pf/esic is concern the deduction will be as par gvt. norms, but in case of pf the bifurction of the chaaln valuue i.e 25.61% will be like this
A/c1- 12% of employee sal.+12% of employer salary
a/c2-1.1% of epf sal.
a/c10- nil as because not deduction of pension amount after completion of 58 yrs. of age i.e 8.33% of eps salary.
a/c21-0.5% of EDLI sal.
a/c-22-0.01% of edli salary
esic deduction willbe the same as per norms.
thanks & regards,
from,
sumit kumar saxena,
9899669071, 0120-4131277
From India, Ghaziabad
Greetings for the day,
Yes if anyone completed the age of 60 yrs. he must be in payroll as far as pf/esic is concern the deduction will be as par gvt. norms, but in case of pf the bifurction of the chaaln valuue i.e 25.61% will be like this
A/c1- 12% of employee sal.+12% of employer salary
a/c2-1.1% of epf sal.
a/c10- nil as because not deduction of pension amount after completion of 58 yrs. of age i.e 8.33% of eps salary.
a/c21-0.5% of EDLI sal.
a/c-22-0.01% of edli salary
esic deduction willbe the same as per norms.
thanks & regards,
from,
sumit kumar saxena,
9899669071, 0120-4131277
From India, Ghaziabad
There is a difference between Provident Fund & Pension fund. In Pension Fund,only 8.33% of Employer Share goes to Pension Fund while In Provident Fund, 12% of employee share & 3.67% of employer share is added to Provident Fund. I hope this will clear your concept.
Thanks
Chandani Shukla
Executive HR, Dainik Jagran
From India, Ranchi
Thanks
Chandani Shukla
Executive HR, Dainik Jagran
From India, Ranchi
Pension Fund is the part of Provident Fun. Pension Fund is 8.33%, Contributed by Employer in Account Number 10-C and Provident Fund is 15.67% (12% Employee + 3.67% by employer) in Account Number -1.
From India, Gurgaon
From India, Gurgaon
Dear chandni, Greetings for the day, I agree with your comments but my concern is only how to manage the epf procedure for an employee completing the age of 60 yrs. sumit
From India, Ghaziabad
From India, Ghaziabad
Dear All,
Generally PF is deducted 12 % from both the employee and employer side. Is is compulsory to employer to pay 12 % PF if employee is getting basic salary more than Rs. 6500/-.
Please suggest as earliest.
From India, Mumbai
Generally PF is deducted 12 % from both the employee and employer side. Is is compulsory to employer to pay 12 % PF if employee is getting basic salary more than Rs. 6500/-.
Please suggest as earliest.
From India, Mumbai
Dear Saxena and Anilvishe,
Ans for your query:
The amount deducted for the persons aged above 60 (to be corret it should be above 58 as per EPS norms) must be shown separately in form 12A like VPF etc.,
Employer need not contribute over and above 6500 basic as per the EPF norms, but many companies are contibuting an equel amount what employees are contribute as a good will gesture.
S.sethupathy
Excellent HR Services,
Erode.
From India, Selam
Ans for your query:
The amount deducted for the persons aged above 60 (to be corret it should be above 58 as per EPS norms) must be shown separately in form 12A like VPF etc.,
Employer need not contribute over and above 6500 basic as per the EPF norms, but many companies are contibuting an equel amount what employees are contribute as a good will gesture.
S.sethupathy
Excellent HR Services,
Erode.
From India, Selam
Dear Anil,
Greetings for the day,
EPF deductions is deducted on basic salary+da/vda+food conc.+ any other undefined allowances eg spl . allowance/other allowances etc, if all the component is less than 6500 epf deduction will be compulsory, if more than it not be but once you become a member of epfo then can't be eliminate when your salary/wages raises from the exceeding limit,
thanks & regards,
from,
sumit kumar saxena,
9899669071, 0120-4131277
From India, Ghaziabad
Greetings for the day,
EPF deductions is deducted on basic salary+da/vda+food conc.+ any other undefined allowances eg spl . allowance/other allowances etc, if all the component is less than 6500 epf deduction will be compulsory, if more than it not be but once you become a member of epfo then can't be eliminate when your salary/wages raises from the exceeding limit,
thanks & regards,
from,
sumit kumar saxena,
9899669071, 0120-4131277
From India, Ghaziabad
Dear sethupathy,
Greetings for the day,
agreed with you comment, but rs. 6500/- is the cealing for EPS/EDLI rather for EPF, The component consider for EPF deduction should be basic+da/vda+food conc+any undefined allowance eg spl .allowances or other allowance.
thanks & regards,
from,
sumit kumar saxena,
9899669071, 0120-4131277
From India, Ghaziabad
Greetings for the day,
agreed with you comment, but rs. 6500/- is the cealing for EPS/EDLI rather for EPF, The component consider for EPF deduction should be basic+da/vda+food conc+any undefined allowance eg spl .allowances or other allowance.
thanks & regards,
from,
sumit kumar saxena,
9899669071, 0120-4131277
From India, Ghaziabad
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