I run a Security Agency. The Principal Employer had been paying me 12% of the basic salary even while the basic was over 15000/- as PF contribution till date. However, once he issued a new P.O. due to minimum wages change, he reduced the PF contribution to a limit of 12% of 15000 only and not the actual basic salary as was being followed earlier. My query is; one, can he do that midway during a contract with the same set of employees, and two, can I be provided a copy of the rules which permit him to do so.
From India, Pune
From India, Pune
Dear Abhishekshub,
Up till now your PE was paying you PF employers' share 12% at actual Basic and now he is paying you 12% on restricted limit of basic as prescribed by law i.e. 15000.
Please refer the SC Judgement in Marathwada Gramin Bank Karmachari Sanghatana Vs Management of Maratwada Gramin Bank (SC 2011 LLR 1130). According to this Judgement you are entitled to discontinue from the remittance of EPF contribution in excess of the rate prescribed by law. This means you can reduce the contribution of 12% on Rs. 15000.
Hope you understand what I said. Further I would like to add for knowledge sharing for you and other readers as under:
You are a contractor. It is your primary responsibility to comply the provisions of applicable to you whether your PE pays to sufficient to comply the law or not / reimburse the cost of the compliance you incurred. e.g. (i) You can not say that my PE not paying me enough so that I can pay to my employees as per Minimum Wage Act. (ii) You can not say that my PE not paying me enough so that I can comply PF, ESI etc.
From India, Mumbai
2556Up till now your PE was paying you PF employers' share 12% at actual Basic and now he is paying you 12% on restricted limit of basic as prescribed by law i.e. 15000.
Please refer the SC Judgement in Marathwada Gramin Bank Karmachari Sanghatana Vs Management of Maratwada Gramin Bank (SC 2011 LLR 1130). According to this Judgement you are entitled to discontinue from the remittance of EPF contribution in excess of the rate prescribed by law. This means you can reduce the contribution of 12% on Rs. 15000.
Hope you understand what I said. Further I would like to add for knowledge sharing for you and other readers as under:
You are a contractor. It is your primary responsibility to comply the provisions of applicable to you whether your PE pays to sufficient to comply the law or not / reimburse the cost of the compliance you incurred. e.g. (i) You can not say that my PE not paying me enough so that I can pay to my employees as per Minimum Wage Act. (ii) You can not say that my PE not paying me enough so that I can comply PF, ESI etc.
From India, Mumbai
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PF Contribution on Leave Encashment - Clarification by EPFO.pdf