Hello Seniors,
Greetings of the Day!!!
I have been working in a company for the last year, where we used to calculate PF contributions like this:
Employee Salary = 10,000
Employee contribution (12%) = 1,200/-
Employer contribution (13.61%) = 1,361/-
Now, they have adopted a system like this:
Employee Salary = 10,000
Employee contribution (12%) = 1,200/-
Employer contribution (13.61%) @ 6,500 = 780/-
Is it right to make such changes in EPF without giving information to the employees/workers?
Kindly revert to me as soon as possible.
With regards,
Shams Tabrez
From India, Karnal
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Greetings of the Day!!!
I have been working in a company for the last year, where we used to calculate PF contributions like this:
Employee Salary = 10,000
Employee contribution (12%) = 1,200/-
Employer contribution (13.61%) = 1,361/-
Now, they have adopted a system like this:
Employee Salary = 10,000
Employee contribution (12%) = 1,200/-
Employer contribution (13.61%) @ 6,500 = 780/-
Is it right to make such changes in EPF without giving information to the employees/workers?
Kindly revert to me as soon as possible.
With regards,
Shams Tabrez
From India, Karnal
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Hi Shams Tabrez,
As per the PF Act, you shall restrict either the ER contribution to 6500/-, i.e., 780/-, or both EE & ER contributions to 6500/-. Whatever contribution you are making above 6500/- will be part of VPF.
As they are suddenly reducing only the ER contribution, it is better to inform the employees. Otherwise, there may be confusion and misunderstandings between the company and employees later on.
From India, Bangalore
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727As per the PF Act, you shall restrict either the ER contribution to 6500/-, i.e., 780/-, or both EE & ER contributions to 6500/-. Whatever contribution you are making above 6500/- will be part of VPF.
As they are suddenly reducing only the ER contribution, it is better to inform the employees. Otherwise, there may be confusion and misunderstandings between the company and employees later on.
From India, Bangalore
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Thanks for your quick response. after giving information to the employees, can we take any legal action on that matter, if yes. how to do it. regards, shams
From India, Karnal
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From India, Karnal
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If I am not wrong, the law states that the minimum contribution from an employer towards PF should be Rs. 780/-, which your company is currently contributing. However, your company has not communicated to its employees about the sudden change in deductions/contributions, which is not correct. In my opinion, it would be best not to pursue legal action against the company.
The company's HR department may consider communicating the sudden change to the employees after consulting with the management.
From India, Pune
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The company's HR department may consider communicating the sudden change to the employees after consulting with the management.
From India, Pune
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Dear,
Please review the following points applicable to you:
1) There is no binding for PF deduction as per law if PF Salary is more than 6500.00 at the time of joining.
2) If employees join the service on a lower PF salary, i.e., less than 6500.00, then as per law, a minimum deduction of 780/- on 6500.00 should be done.
3) If the PF salary is more than 6500.00, then consider VPF if employees are interested in contributing more beyond the limit.
4) For VPF contributions, please first complete the necessary written procedures with employees to prevent legal complications in the future.
Maher B.B.
9421664180
From India, Jalgaon
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Please review the following points applicable to you:
1) There is no binding for PF deduction as per law if PF Salary is more than 6500.00 at the time of joining.
2) If employees join the service on a lower PF salary, i.e., less than 6500.00, then as per law, a minimum deduction of 780/- on 6500.00 should be done.
3) If the PF salary is more than 6500.00, then consider VPF if employees are interested in contributing more beyond the limit.
4) For VPF contributions, please first complete the necessary written procedures with employees to prevent legal complications in the future.
Maher B.B.
9421664180
From India, Jalgaon
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It is true that as per the statute, the contribution for both employer and employee could be Rs. 6500/- (Basic + DA + VDA). In excess of this, if the employer desires to deduct from their employees on the entire salary, it would be treated as VPF, in which case written consent needs to be obtained from the employee concerned.
The issue is, if the deduction was effected on the entire salary earlier, i.e., 1200/- @ 10000/-, a subsequent decision in reducing the contributory amount in respect of the same employee could attract legal opinion, which needs to be checked. However, for fresh recruits, the revised system could hold good. Further, I suggest that an intimation to this effect could also be given to the PF authority to be on the safer side.
Regards,
bk mohanty
Director
Cypress Management Associates
9937822563
From India, Bhubaneswar
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The issue is, if the deduction was effected on the entire salary earlier, i.e., 1200/- @ 10000/-, a subsequent decision in reducing the contributory amount in respect of the same employee could attract legal opinion, which needs to be checked. However, for fresh recruits, the revised system could hold good. Further, I suggest that an intimation to this effect could also be given to the PF authority to be on the safer side.
Regards,
bk mohanty
Director
Cypress Management Associates
9937822563
From India, Bhubaneswar
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As per the law, the organization can contribute the basic amount of up to Rs. 6500 only. If it is more than that, it is not objectionable by the department. But an employee can object to deducting the EPF on a basic of 6500 or exceeding Rs. 6500 per month.
From India, Jaipur
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From India, Jaipur
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At the time of joining, if the basic+DA+VDA is less than 6500/-, the contribution would be accordingly at 12% from both the employee and employer. Subsequently, if such salary components exceed 6500/-, the employer might restrict their contribution to 6500/-, while the employee, if they so desire, might agree in writing to contribute the entire salary components exceeding 6500/-, to be termed as VPF.
Regards,
B.K. Mohanty
9937822563
From India, Bhubaneswar
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Regards,
B.K. Mohanty
9937822563
From India, Bhubaneswar
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Dear Govind Singh Ji,
Greetings of the day to you as well as all viewers.
In the current thread, the question is whether once an EPS account is settled between the ages of 50 and 58, can an employee become a member of EPS again. I have replied to it. I have full confidence in my reply.
From India, Mumbai
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Greetings of the day to you as well as all viewers.
In the current thread, the question is whether once an EPS account is settled between the ages of 50 and 58, can an employee become a member of EPS again. I have replied to it. I have full confidence in my reply.
From India, Mumbai
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EPF ON LINE REGN. USER MANUAL.pdf