The provident fund (PF) department has voluntarily given up its powers to take action against employers who fail to deposit workers' dues unless it can name workers whose savings are in danger, evoking protest from union leaders and labor experts who said this could protect companies that fail to make PF contributions.
The directive also sets a seven-year limit for probing cases of PF default by companies that are required to remit 24% of a worker's salary into their provident fund accounts till they retire.
What are your views on this?
From India, Gurgaon
Acknowledge(0)
Amend(0)
37The directive also sets a seven-year limit for probing cases of PF default by companies that are required to remit 24% of a worker's salary into their provident fund accounts till they retire.
What are your views on this?
From India, Gurgaon
Acknowledge(0)Amend(0)
Dear Shweta,
This is very unfortunate! As it is, the PF authorities lacked teeth to enforce the Act; but now it will encourage the small and dubious companies to pocket the contributions with impunity. Provident fund is meant as the last resort of subsistence for an employee; however, it will no longer remain so. If the government is not interested in taking responsibility for the fund or its implementation, then it's better to scrap the Act altogether rather than let the wolves loose among the lambs!
Warm regards.
From India, Delhi
Acknowledge(0)Amend(0)
This is very unfortunate! As it is, the PF authorities lacked teeth to enforce the Act; but now it will encourage the small and dubious companies to pocket the contributions with impunity. Provident fund is meant as the last resort of subsistence for an employee; however, it will no longer remain so. If the government is not interested in taking responsibility for the fund or its implementation, then it's better to scrap the Act altogether rather than let the wolves loose among the lambs!
Warm regards.
From India, Delhi
Acknowledge(0)Amend(0)
Very True!!! But this is injustice and what we can do is to make people aware of this so that they take their salary breakup very seriously and negotiate on in hand salary not on CTC.
From India, Gurgaon
Acknowledge(0)Amend(0)
From India, Gurgaon
Acknowledge(0)Amend(0)
I appreciate your intent to "make people aware of this so that they take their salary breakup very seriously and negotiate on in-hand salary not on CTC."
In fact, the concept of CTC, as it has evolved, is very erroneous, which every HR professional in their heart would agree with. It's more of a PR exercise and display by a company when soliciting the services of a candidate, rather than what a new entrant is actually concerned with.
The employer's share of PF contribution is now routinely shown on the CTC statement given with the offer, as is the ESI or any other contribution made by the company on behalf of employees.
Sure, there are always a lot of costs associated with manpower, but why should a prospective employee be concerned with the costs that a company incurs, which are not directly credited to their salary account?
For instance, even gratuity is shown in CTC. What is the point of taking into consideration gratuity during salary negotiation and then paying the employee the amount at the end of their service period from their negotiated salary package?
Does it not amount to complying with the law at the cost of the employees' own salary package?
What about those who leave the company before completing 5 years? No company gives a certain definite answer on this.
Moreover, what is the actual meaning of "gratuity"? Is it not like a reward for services rendered? Then why should it be deducted from the salary package every month and then paid out at the end of the service?
Isn't it like deducting a part of the bill at a restaurant and then saying, "this is the 'tip' that I would like to pay the waiter"? Would any restaurant or hotel owner permit this?
As HR professionals, we have a lot of points to ponder over and need to MAKE PEOPLE AWARE that what they accept as a MATTER-OF-FACT may not be so.
Warm regards.
From India, Delhi
Acknowledge(0)Amend(0)
In fact, the concept of CTC, as it has evolved, is very erroneous, which every HR professional in their heart would agree with. It's more of a PR exercise and display by a company when soliciting the services of a candidate, rather than what a new entrant is actually concerned with.
The employer's share of PF contribution is now routinely shown on the CTC statement given with the offer, as is the ESI or any other contribution made by the company on behalf of employees.
Sure, there are always a lot of costs associated with manpower, but why should a prospective employee be concerned with the costs that a company incurs, which are not directly credited to their salary account?
For instance, even gratuity is shown in CTC. What is the point of taking into consideration gratuity during salary negotiation and then paying the employee the amount at the end of their service period from their negotiated salary package?
Does it not amount to complying with the law at the cost of the employees' own salary package?
What about those who leave the company before completing 5 years? No company gives a certain definite answer on this.
Moreover, what is the actual meaning of "gratuity"? Is it not like a reward for services rendered? Then why should it be deducted from the salary package every month and then paid out at the end of the service?
Isn't it like deducting a part of the bill at a restaurant and then saying, "this is the 'tip' that I would like to pay the waiter"? Would any restaurant or hotel owner permit this?
As HR professionals, we have a lot of points to ponder over and need to MAKE PEOPLE AWARE that what they accept as a MATTER-OF-FACT may not be so.
Warm regards.
From India, Delhi
Acknowledge(0)Amend(0)Looking for something specific? - Join & Be Part Of Our Community and get connected with the right people who can help. Our AI-powered platform provides real-time fact-checking, peer-reviewed insights, and a vast historical knowledge base to support your search.
Provident Fund - Excluded Employee - Definition.pdf
What is Employee Provident Fund.docx