Dear All,
I have a query and need your suggestion. The query is as follows: A person joined our company on 01.04.10 at a basic salary of Rs. 10,000/-, and as he is not entitled to PF since his basic salary is above Rs. 6,500/- at the time of joining. After one year of service in the company, as of 01.04.11, his basic salary was increased to Rs. 12,000/-. Now that he has completed one year, the company wants to provide him with PF benefits. My question is, can a company extend such benefits to a person after one year of service in the company or at any other point after joining? Please discuss.
Regards,
DG
From India, Calcutta
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1I have a query and need your suggestion. The query is as follows: A person joined our company on 01.04.10 at a basic salary of Rs. 10,000/-, and as he is not entitled to PF since his basic salary is above Rs. 6,500/- at the time of joining. After one year of service in the company, as of 01.04.11, his basic salary was increased to Rs. 12,000/-. Now that he has completed one year, the company wants to provide him with PF benefits. My question is, can a company extend such benefits to a person after one year of service in the company or at any other point after joining? Please discuss.
Regards,
DG
From India, Calcutta
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Hi,
As per EPF conditions, when a person joins an organization and starts working, it is the sole responsibility of the employer to deduct the EPF amount from the employee's salary from the first day of employment and contribute it to the EPF commissioner's office. However, this deduction is restricted to 6500 (basic salary).
In your case, after one year, you are planning to deduct the amount from the employee's basic salary and contribute it to the EPF commissioner's office. This is not possible after one year.
From India
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As per EPF conditions, when a person joins an organization and starts working, it is the sole responsibility of the employer to deduct the EPF amount from the employee's salary from the first day of employment and contribute it to the EPF commissioner's office. However, this deduction is restricted to 6500 (basic salary).
In your case, after one year, you are planning to deduct the amount from the employee's basic salary and contribute it to the EPF commissioner's office. This is not possible after one year.
From India
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There is no problem if you make a resolution that all employees, irrespective of their salary, would be brought under EPF coverage. The effect of such coverage can take place from the present date and not necessarily from the date of joining of each employee. It is not possible to apply it retrospectively since it would result in a significant liability towards past PF contributions.
Regards,
Madhu.T.K
From India, Kannur
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Regards,
Madhu.T.K
From India, Kannur
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Mr. Madhu, you are right, but a huge amount of past E.P.F. liability will be imposed on the employer with the current interest, and you will also face legal problems. You will need to show all past data related to employment, which may not be possible to manipulate, such as salary records, attendance records, leave records, employment registers, and more.
So, it's better to stay calm and implement the policy on newcomers rather than existing employees. Also, ensure to have them sign a declaration form stating their unwillingness to contribute to EPF.
From India
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So, it's better to stay calm and implement the policy on newcomers rather than existing employees. Also, ensure to have them sign a declaration form stating their unwillingness to contribute to EPF.
From India
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I do agree with Mr. Vikas Sharma, but 6500 basic is not the limit of PF deduction. It's a ceiling limit, i.e., the pension fund should be calculated on Rs. 6500/- (max Rs. 541/- will go to the pension fund), and the difference should go to the PF fund (Employer's cont).
As per the PF deduction, from day one, PF has to be contributed for all except Apprentices who are covered under the Apprentice Act.
Regards, Dinesh Adikane
From India, Wardha
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As per the PF deduction, from day one, PF has to be contributed for all except Apprentices who are covered under the Apprentice Act.
Regards, Dinesh Adikane
From India, Wardha
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It is not necessary that it should be restricted to NEW EMPLOYEES but you can make it applicable to existing employees also BUT WITH EFFECT FROM A PRESENT DATE. Regards, Madhu.T.K
From India, Kannur
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From India, Kannur
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HI Madhu, This is possible if company give new joining date,effect from may 2011 to existing employee but in this case there Gratuity period will affect. so this is not possible at all.
From India
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From India
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There is no problem to give him pf benefit, but you will have to show his DOJ from May’11 and restrict his contribution on 6500/- (780/-). Sanjeev
From India, Delhi
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From India, Delhi
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Kindly don't get confused on this issue. What Mr. Madhu has written is correct. Indian Labour Laws are benevolent in nature, and generally, there are no restrictions or ceiling on benefits; they can be better than what is stipulated by Law.
Warm regards.
From India, Delhi
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Warm regards.
From India, Delhi
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Thank you for your response. I also believe that Mr. Madhu is correct. In this case, PF applicability is voluntary, so it can be initiated at a later date agreed upon by both the employer and the employee. I would like to clarify one point: Can this issue be handled on a case-by-case basis, or do we need to make it applicable to all employees who exceed the ceiling?
Regards,
DG
From India, Calcutta
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Regards,
DG
From India, Calcutta
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