Hello seniors!
My query is, my company has 19 employees and 1 contract employee (whose PF is being paid by the contractor). So, my queries are:
1. Should we include the contract employee while going for PF Registration? If yes, why, as his PF is already paid by the employer?
2. If we should not include him, then is it voluntary for us to go for PF registration? Because it was compulsory when we had 20 or more employees. Please confirm if we should include the contract employee or not?
I am posting a query on this site for the first time; please help me.
Expecting valuable replies from seniors.
Best Regards,
Meenakshi Kalra
From India, Delhi
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My query is, my company has 19 employees and 1 contract employee (whose PF is being paid by the contractor). So, my queries are:
1. Should we include the contract employee while going for PF Registration? If yes, why, as his PF is already paid by the employer?
2. If we should not include him, then is it voluntary for us to go for PF registration? Because it was compulsory when we had 20 or more employees. Please confirm if we should include the contract employee or not?
I am posting a query on this site for the first time; please help me.
Expecting valuable replies from seniors.
Best Regards,
Meenakshi Kalra
From India, Delhi
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Hello Meenakshi Kalra,
PF registration is mandatory for an organization when it reaches a headcount of 20. The headcount should take into account both on-roll employees and contractors as well. In your organization's situation, since you already have 19 employees + 1 contractor, you should now go for PF registration.
However, the PF contribution for the contractor may not be required since it is covered through a third-party contractor.
Hope this clarifies.
Srikanth
From India, Bangalore
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2PF registration is mandatory for an organization when it reaches a headcount of 20. The headcount should take into account both on-roll employees and contractors as well. In your organization's situation, since you already have 19 employees + 1 contractor, you should now go for PF registration.
However, the PF contribution for the contractor may not be required since it is covered through a third-party contractor.
Hope this clarifies.
Srikanth
From India, Bangalore
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Thank you, Sir, for your valuable reply. We currently have 20 employees, including the third-party contract employee. If we exclude that person, we have 19 employees. I am unsure whether it is voluntary for us to proceed with PF Registration or if it is compulsory. Our employee strength has remained at this level since April '13. I am in a dilemma and would appreciate further insight on this matter based on your experience.
Thank you in advance.
Best Regards,
Meenakshi
From India, Delhi
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Thank you in advance.
Best Regards,
Meenakshi
From India, Delhi
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Hi Meenakshi Kalra,
PF registration and PF contribution remittance are two different things. From the PF registration perspective, your organization needs to register for PF since you have reached a headcount of 20 employees. According to PF rules, you must consider all employees working for your company, whether they are on the payroll or are contractors. This is because your company is the principal employer for those contract employees.
Regarding PF contribution remittance, you are required to make PF payments for 19 employees only. The PF contribution for the contract employee will be paid by your contractors (third-party vendors).
Please ensure to collect the following documents: a) PF remittance challan and b) PF online extract to demonstrate that the contract employee is registered under PF. The PF department may inspect your office and expect you to maintain these documents.
Thank you.
From India, Bangalore
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PF registration and PF contribution remittance are two different things. From the PF registration perspective, your organization needs to register for PF since you have reached a headcount of 20 employees. According to PF rules, you must consider all employees working for your company, whether they are on the payroll or are contractors. This is because your company is the principal employer for those contract employees.
Regarding PF contribution remittance, you are required to make PF payments for 19 employees only. The PF contribution for the contract employee will be paid by your contractors (third-party vendors).
Please ensure to collect the following documents: a) PF remittance challan and b) PF online extract to demonstrate that the contract employee is registered under PF. The PF department may inspect your office and expect you to maintain these documents.
Thank you.
From India, Bangalore
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Dear Meenakshi,
It seems that you are not aware of the difference between a direct employee and the employee engaged through a contractor (for whom you are the principal employer). Please ask the contractor to open the PF account for the contract employee.
Bye
From India, Moradabad
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It seems that you are not aware of the difference between a direct employee and the employee engaged through a contractor (for whom you are the principal employer). Please ask the contractor to open the PF account for the contract employee.
Bye
From India, Moradabad
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Dear Meenakshi,
While calculating the number of employees for PF eligibility, all the employees (including contract employees) are taken into account. Therefore, your company is legally eligible for coverage under EPF. However, if the PF of the contract employee is paid by the contractor, there is no financial liability on you to pay his PF, but you are certainly eligible for coverage under EPF Act. So, it is like; the total number of employees is 20, and the number of PF members will be 19. When you apply for a PF code number, please mention that Mr. X is a contract employee in 'the list of members' that you will attach with the application.
Regards,
Kapil
From India, Delhi
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While calculating the number of employees for PF eligibility, all the employees (including contract employees) are taken into account. Therefore, your company is legally eligible for coverage under EPF. However, if the PF of the contract employee is paid by the contractor, there is no financial liability on you to pay his PF, but you are certainly eligible for coverage under EPF Act. So, it is like; the total number of employees is 20, and the number of PF members will be 19. When you apply for a PF code number, please mention that Mr. X is a contract employee in 'the list of members' that you will attach with the application.
Regards,
Kapil
From India, Delhi
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I agree with the views of Mr. Kapil. For the purpose of coverage, such an employee can be counted, but for the purpose of contribution, the employer has to ensure that the contractor is deducting and depositing the PF contributions every month with the RPFC. Please obtain the details of the PF code number of the contractor.
AK Chandok
RPFC (Retd.)
From India, Chandigarh
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AK Chandok
RPFC (Retd.)
From India, Chandigarh
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Hi Meenakshi Kalra,
In case the contract worker is engaged through a contractor who has his own PF Establishment Code and his own Labour License, the contract worker can be treated as belonging to a separate establishment for PF/EPS purposes. Otherwise, the contract worker becomes an employee of the principal employer.
R. Krishna Murthy
From India, Nizamabad
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In case the contract worker is engaged through a contractor who has his own PF Establishment Code and his own Labour License, the contract worker can be treated as belonging to a separate establishment for PF/EPS purposes. Otherwise, the contract worker becomes an employee of the principal employer.
R. Krishna Murthy
From India, Nizamabad
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