Dear Experts,
I recently joined a private limited company as an HR Executive. This company is paying 12% of the basic towards PF contribution. I told the management that the company can restrict the PF contribution to Rs. 780 per month, which will save money for the company. The management has asked me to start the procedures.
My doubts are:
1. Can a company stop the 12% contribution and start contributing Rs. 780 in the middle of the operations?
2. If yes, can this change be applied to all employees or only to newly joining employees?
3. What is the procedure to do this?
Note: The company's current strength is 90+. It was established in 2010.
From India, Chennai
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2I recently joined a private limited company as an HR Executive. This company is paying 12% of the basic towards PF contribution. I told the management that the company can restrict the PF contribution to Rs. 780 per month, which will save money for the company. The management has asked me to start the procedures.
My doubts are:
1. Can a company stop the 12% contribution and start contributing Rs. 780 in the middle of the operations?
2. If yes, can this change be applied to all employees or only to newly joining employees?
3. What is the procedure to do this?
Note: The company's current strength is 90+. It was established in 2010.
From India, Chennai
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Hi,
As per the latest amendment, an employer cannot reduce wages according to the Provident Fund Act. No employer, in relation to an establishment to which any Scheme or Insurance Scheme applies, shall, solely due to their liability for the payment of any contribution to the Fund or the Insurance Fund or any charges under this Act, Scheme, or Insurance Scheme, reduce, whether directly or indirectly, the wages of any employee to whom the Scheme or Insurance Scheme applies or the total quantum of benefits in the nature of old age pension, gratuity, provident fund, or life insurance to which the employee is entitled under the terms of their employment, express or implied.
From India, Mumbai
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As per the latest amendment, an employer cannot reduce wages according to the Provident Fund Act. No employer, in relation to an establishment to which any Scheme or Insurance Scheme applies, shall, solely due to their liability for the payment of any contribution to the Fund or the Insurance Fund or any charges under this Act, Scheme, or Insurance Scheme, reduce, whether directly or indirectly, the wages of any employee to whom the Scheme or Insurance Scheme applies or the total quantum of benefits in the nature of old age pension, gratuity, provident fund, or life insurance to which the employee is entitled under the terms of their employment, express or implied.
From India, Mumbai
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Hi, Yes, you can do this now, for all employees. We have attached the relevant circular for your immediate reference. In case, you are looking for any professional support, please write to us.
From India, Chennai
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From India, Chennai
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Hi Pragana HR,
Please read the notification. It states that no one should force the employer to contribute beyond the ceiling limit. The question is, can we stop contributing over the ceiling between the operation? For this, you need to read the new amendments in EPF, so please read my post clearly.
Please refer to PF section 12. In case the employer is currently deducting PF higher than the prescribed limit of Rs 6500 and depositing the same to RPFC, the employer can reduce and limit it to Rs 6500.
From India, Mumbai
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Please read the notification. It states that no one should force the employer to contribute beyond the ceiling limit. The question is, can we stop contributing over the ceiling between the operation? For this, you need to read the new amendments in EPF, so please read my post clearly.
Please refer to PF section 12. In case the employer is currently deducting PF higher than the prescribed limit of Rs 6500 and depositing the same to RPFC, the employer can reduce and limit it to Rs 6500.
From India, Mumbai
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Hi Aditya,
Please note that the question was not about stopping all contributions; rather, they wanted to reduce the contribution above the ceiling (Rs. 6500/-). Therefore, we suggested some possibilities. I hope it is clear now.
From India, Chennai
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Please note that the question was not about stopping all contributions; rather, they wanted to reduce the contribution above the ceiling (Rs. 6500/-). Therefore, we suggested some possibilities. I hope it is clear now.
From India, Chennai
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Hi,
If the employer is currently deducting PF on an amount higher than the prescribed limit of Rs 6500 and depositing the excess to RPFC, the employer can adjust and limit it to Rs 6500. The employer can restrict their contribution up to the ceiling of Rs 6500. However, if the employee's contribution exceeds this limit, the employer cannot reduce the limit.
Hope this clarifies things.
From India, Mumbai
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If the employer is currently deducting PF on an amount higher than the prescribed limit of Rs 6500 and depositing the excess to RPFC, the employer can adjust and limit it to Rs 6500. The employer can restrict their contribution up to the ceiling of Rs 6500. However, if the employee's contribution exceeds this limit, the employer cannot reduce the limit.
Hope this clarifies things.
From India, Mumbai
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It can be, there is a supreme court judgement in Marathwada Gramin Bank case. Please refer the attached judgement, The aforesaid circular was issued on basis of this case only.
From India, Chennai
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From India, Chennai
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HI, Yes you are right, but when employee is entitled under the terms of his employment, express or implied that can not be reduce.
From India, Mumbai
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From India, Mumbai
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Hi,
I need the EPF Act clause and section that states that an employer can reduce the employee contribution at any time. I have seen your notification but I want to know under which section it specifies that the employer can reduce the employee contribution at any time.
From India, Mumbai
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I need the EPF Act clause and section that states that an employer can reduce the employee contribution at any time. I have seen your notification but I want to know under which section it specifies that the employer can reduce the employee contribution at any time.
From India, Mumbai
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Sir,
1. It is clearly mentioned in the circular of EPFO dated 27/05/2014, not to force the employers to contribute over and above the statutory wage ceiling in respect of their employees. Therefore, in my opinion, the employers who are contributing over and above the wage ceiling can reduce their part of the contribution as per the above circular of EPFO.
2. However, I will suggest to the person who initiated this thread to please seek prior approval from the authorized officer of their appropriate EPFO office indicating therein the circular of EPFO Hqrs. as mentioned above. The prior approval will definitely avoid any risk of levy of interest and damages in case of any other opinion of the officer concerned.
From India, Noida
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1. It is clearly mentioned in the circular of EPFO dated 27/05/2014, not to force the employers to contribute over and above the statutory wage ceiling in respect of their employees. Therefore, in my opinion, the employers who are contributing over and above the wage ceiling can reduce their part of the contribution as per the above circular of EPFO.
2. However, I will suggest to the person who initiated this thread to please seek prior approval from the authorized officer of their appropriate EPFO office indicating therein the circular of EPFO Hqrs. as mentioned above. The prior approval will definitely avoid any risk of levy of interest and damages in case of any other opinion of the officer concerned.
From India, Noida
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