Dear All,
In our company, the management is planning to remove PF deduction for the employees whose Basic is more than 6500 pm. Please suggest whether we can remove the PF account for the employees whose PF account already exists, or if there is any alternative way to stop PF deduction.
Regards,
Mahalakshmi
From India, Bangalore
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1In our company, the management is planning to remove PF deduction for the employees whose Basic is more than 6500 pm. Please suggest whether we can remove the PF account for the employees whose PF account already exists, or if there is any alternative way to stop PF deduction.
Regards,
Mahalakshmi
From India, Bangalore
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It will be difficult if you have already started this practice. Literally, you will be reducing the compensation. It requires acceptance by employees; it will generate dissatisfaction. I have not examined the legality of this so far.
From India, Chennai
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From India, Chennai
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Dear Mahalakshmi,
PF contribution CANNOT be stopped once started, even when the Basic exceeds Rs. 6500/-. You can offer a new incumbent an option to opt in or opt out of PF if the Basic is more than Rs. 6500/-.
Thank you.
From India, Ahmedabad
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PF contribution CANNOT be stopped once started, even when the Basic exceeds Rs. 6500/-. You can offer a new incumbent an option to opt in or opt out of PF if the Basic is more than Rs. 6500/-.
Thank you.
From India, Ahmedabad
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Dear Friends,
To the best of my knowledge, there is no option for removing PF deduction if an employee is under regular scales of pay. We can only restrict the contribution to Rs. 780/- up to the wages of Rs. 6500/- per month.
Mangai
Chennai
From India, Chennai
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To the best of my knowledge, there is no option for removing PF deduction if an employee is under regular scales of pay. We can only restrict the contribution to Rs. 780/- up to the wages of Rs. 6500/- per month.
Mangai
Chennai
From India, Chennai
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Thanks for your Support. Can you please help me out if the empolyee is not opting for PF then what would be the procedure. Whether Form 11 supports for the same. Regards, Mahalakshmi
From India, Bangalore
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From India, Bangalore
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Dear Mahalakshmi, Yes! Form 11 is mandatory for the company to keep for their records for all those employees opting out of PF.
From India, Ahmedabad
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From India, Ahmedabad
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Dear Mahalakshmi, There is no provision in the EPF Act to stop coverage of employees irrespective of their basic salaries once their contribution is started in the organization. Regards, Suresh
From India, Bangalore
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From India, Bangalore
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(Fact Checked)-The user's reply is correct. Once an employee's PF contribution has started, it cannot be stopped based on their salary exceeding a certain threshold. (1 Acknowledge point)
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No such provision for stop recovery and deposit of PF contribution to PF authorities. Once the company has started, there is no provision for the employer and employee to stop payment of EPF contribution. Only for new joiners, the exercise is optional provided their Basic + DA is more than Rs. 6500/- per month. In such cases, the employees have to submit the prescribed Form-II with all the details.
Moorti
From India, Delhi
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Moorti
From India, Delhi
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Dear Mahalakshmi,
PF is mandatory and is monitored by the Central Govt. through the Employees Provident Fund Act, 1952. As per the Act, the Management must pay PF based on the Basic Salary of the Employee. If the employee's salary exceeds Rs. 6,500, the management does not need to contribute the excess amount.
There is another proposal pending at the government level that suggests the Management has to pay PF for the entire salary amount, even if it exceeds Rs. 6,500.
From India, Kurnool
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PF is mandatory and is monitored by the Central Govt. through the Employees Provident Fund Act, 1952. As per the Act, the Management must pay PF based on the Basic Salary of the Employee. If the employee's salary exceeds Rs. 6,500, the management does not need to contribute the excess amount.
There is another proposal pending at the government level that suggests the Management has to pay PF for the entire salary amount, even if it exceeds Rs. 6,500.
From India, Kurnool
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Hello Madam,
For employee satisfaction, you need to inform all your employees. Similarly, you need to inform the concerned PF office for the same and obtain written approval from the respective PF commissioner.
Thank you.
Regards,
Ashish
From India, Pune
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For employee satisfaction, you need to inform all your employees. Similarly, you need to inform the concerned PF office for the same and obtain written approval from the respective PF commissioner.
Thank you.
Regards,
Ashish
From India, Pune
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Dear Mahalakshmi,
You must act as HR. That's what you are, making the same tune of the employer. The employer would have asked you to stop PF benefits. You are HIS MASTER VOICE. As HR, you have to explain the position to your boss. Even now, you are asking about Form 11 to eliminate the employee from the PF scheme. This Form 11 needs to be filled for new entrants who are above Rs. 6500/-. Even for these employees, you have to ascertain whether they were covered under the EPF SCHEME in the previous unit.
Regards,
V. Subbarao
From India, Madras
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You must act as HR. That's what you are, making the same tune of the employer. The employer would have asked you to stop PF benefits. You are HIS MASTER VOICE. As HR, you have to explain the position to your boss. Even now, you are asking about Form 11 to eliminate the employee from the PF scheme. This Form 11 needs to be filled for new entrants who are above Rs. 6500/-. Even for these employees, you have to ascertain whether they were covered under the EPF SCHEME in the previous unit.
Regards,
V. Subbarao
From India, Madras
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Just curious to know if a company terminates all of its employees and hires them again, would PF deduction be mandatory if the employees also opt out of PF contribution? Thanks in advance.
From India, Delhi
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From India, Delhi
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Dear Mahalakshmi,
I apologize for the confusion. Once you are in the PF scheme, you do not have the option to quit or remove your PF account. However, a new employee who does not have a PF account and whose PF wages exceed 6500/- can choose to opt out of PF by submitting Form II.
Regards,
Biju
From India, Calicut
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I apologize for the confusion. Once you are in the PF scheme, you do not have the option to quit or remove your PF account. However, a new employee who does not have a PF account and whose PF wages exceed 6500/- can choose to opt out of PF by submitting Form II.
Regards,
Biju
From India, Calicut
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Yes, PF is mandatory. For trade purposes, they are terminating and rehiring. This behavior implies that the employer is intentionally doing this to avoid PF contributions. The employees do not have an option in this scenario. According to the act, this is the only way to proceed.
Regards,
V. Subbarao
From India, Madras
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Regards,
V. Subbarao
From India, Madras
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Dear Mahalakshmi,
Greetings for the day!!!
Once joined, it is compulsory to pay even if one exceeds the basic of Rs. 6,500/-; now, there is a plan to remove the limit, and everyone has to pay. It's a measure of social welfare, and everyone has a right to enjoy that privilege.
Regards,
Hari
From India, Mumbai
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Greetings for the day!!!
Once joined, it is compulsory to pay even if one exceeds the basic of Rs. 6,500/-; now, there is a plan to remove the limit, and everyone has to pay. It's a measure of social welfare, and everyone has a right to enjoy that privilege.
Regards,
Hari
From India, Mumbai
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If an employer is deducting and depositing EPF amounts above Rs 6500, they can later reduce it to Rs 6500. In this scenario, Section 12 of the EPF Act, which prohibits reducing wages, will not apply. This was the decision in the case of Marathwada Gramin Bank Karamchari Sanghatana and Another vs. Management of Marathwada Gramin Bank and Others (SC 2011 LLR 1130).
From India, Kota
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From India, Kota
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(Fact Checked)-The user's reply is correct. Well done! (1 Acknowledge point)
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Sir / Madam, What amount is to be deducted when the basic crosses Rs. 6500/- Is Rs. 780/- maximum or this amount can be increased? Pl. opine. Thanks, Vijay
From India, Pune
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From India, Pune
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The corrected text with proper paragraph formatting:
Rs. 780 is the ceiling amount for a 6500 pm basic + DA. Alternatively, you can provide 12% of the actual basic as PF (3.67% + any excess amount over 541) and Pension (8.33% or 541, whichever is lower), along with 1.61% for Admin and EDLI charges based on the employer's preference.
From India, Kota
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Rs. 780 is the ceiling amount for a 6500 pm basic + DA. Alternatively, you can provide 12% of the actual basic as PF (3.67% + any excess amount over 541) and Pension (8.33% or 541, whichever is lower), along with 1.61% for Admin and EDLI charges based on the employer's preference.
From India, Kota
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Dear sir,
My name is Krishna Kant Singh. If a company hires an HR employee for the HR officer position without a degree, is it legally or illegally acceptable? What are the regulations or rules pertaining to HR and the company’s punishment for such actions? The concerned individual may engage in fraudulent activities such as manipulating bonus schemes, gratuity, and leave policies without adhering to any legal standards. Could you please advise on the appropriate course of action to be taken against the employee or the employer in such circumstances?
Thank you.
From India, Nagar
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My name is Krishna Kant Singh. If a company hires an HR employee for the HR officer position without a degree, is it legally or illegally acceptable? What are the regulations or rules pertaining to HR and the company’s punishment for such actions? The concerned individual may engage in fraudulent activities such as manipulating bonus schemes, gratuity, and leave policies without adhering to any legal standards. Could you please advise on the appropriate course of action to be taken against the employee or the employer in such circumstances?
Thank you.
From India, Nagar
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Dear Mahalaxmi,
You can stop PF contribution if Basic is more than Rs. 6,500. According to the law, the employer can be exempted. However, if you calculate the CTC of a Higher Salaried Person, PF is helpful in showing a bigger amount, and the employee is tied up with the company. On the other hand, it is a big loss to employees.
I want to suggest one thing to all HR professionals: write a letter to the PF commissioner to increase the limit of PF contribution, which is in favor of employees. The average minimum wage in India is Rs. 5,044 for 26 days, and the max PF limit is Rs. 6,500.
Thank you,
Parvez
9374149908
From India, Ahmadabad
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You can stop PF contribution if Basic is more than Rs. 6,500. According to the law, the employer can be exempted. However, if you calculate the CTC of a Higher Salaried Person, PF is helpful in showing a bigger amount, and the employee is tied up with the company. On the other hand, it is a big loss to employees.
I want to suggest one thing to all HR professionals: write a letter to the PF commissioner to increase the limit of PF contribution, which is in favor of employees. The average minimum wage in India is Rs. 5,044 for 26 days, and the max PF limit is Rs. 6,500.
Thank you,
Parvez
9374149908
From India, Ahmadabad
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Benefits under EPF act.docx
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(Fact Checked)-The employee can opt out of PF by submitting Form 11. This form is used to declare non-eligibility for PF. It is a valid procedure. (1 Acknowledge point)