As a new circular has been circulated regarding an increase in the standard PF amount from Rs. 780 to Rs. 1800, can anyone help me with the below questions:
1. Can an existing employee opt-out of PF if they are not interested in the heavy deduction?
2. If an existing employee opts out of PF, will there be any impact on the organization?
3. For new joiners, do they have the option to opt-out of PF, or is PF mandatory?
From India, Hyderabad
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11. Can an existing employee opt-out of PF if they are not interested in the heavy deduction?
2. If an existing employee opts out of PF, will there be any impact on the organization?
3. For new joiners, do they have the option to opt-out of PF, or is PF mandatory?
From India, Hyderabad
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Hi TR,
Responses for your queries:
1) The main purpose of increasing the PF wage limit is to provide more coverage for PF accounts and to enable more savings. In this scenario, no existing EPF member can opt out of EPF coverage. Even if an employee's wages are above 15000/- and they are already a contributing member, they must continue their contributions.
2) Yes, as per the PF notification, existing employees cannot opt out of PF contributions. If they do decide to quit, whenever an inspection occurs, EPF Enforcement officers will charge both the employer and employee contributions, along with interest and penalties.
3) If a new employee has a basic salary of less than 15000/-, PF contribution is mandatory. If the new employee's salary is above 15000/- and they had an EPF account in a previous organization, they will only become a coverable member.
Please let me know if you need further clarification or assistance.
From India, Bangalore
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Responses for your queries:
1) The main purpose of increasing the PF wage limit is to provide more coverage for PF accounts and to enable more savings. In this scenario, no existing EPF member can opt out of EPF coverage. Even if an employee's wages are above 15000/- and they are already a contributing member, they must continue their contributions.
2) Yes, as per the PF notification, existing employees cannot opt out of PF contributions. If they do decide to quit, whenever an inspection occurs, EPF Enforcement officers will charge both the employer and employee contributions, along with interest and penalties.
3) If a new employee has a basic salary of less than 15000/-, PF contribution is mandatory. If the new employee's salary is above 15000/- and they had an EPF account in a previous organization, they will only become a coverable member.
Please let me know if you need further clarification or assistance.
From India, Bangalore
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Dear Tanuja,
PF is a social security provided by the employer. Every employee should opt for that. In central Government and PSU, it is compulsory. However, in some private organizations, they can change it as per their wish and will.
Regarding your query:
1. No, if he is already a member, then he cannot quit. It is the duty of HR personnel to counsel the employee.
2. Yes, if there is an inspection, you may be charged to pay both, including interest and damage charges.
3. For a new joinee, yes, if his basic pay is more than Rs 15,000. However, if he is already a member and joins a new organization after resignation, then in that case, he cannot opt for that.
Please let me know if you need any further clarification.
Regards,
Pranab Chakraborty
9404384433
From India, Mumbai
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PF is a social security provided by the employer. Every employee should opt for that. In central Government and PSU, it is compulsory. However, in some private organizations, they can change it as per their wish and will.
Regarding your query:
1. No, if he is already a member, then he cannot quit. It is the duty of HR personnel to counsel the employee.
2. Yes, if there is an inspection, you may be charged to pay both, including interest and damage charges.
3. For a new joinee, yes, if his basic pay is more than Rs 15,000. However, if he is already a member and joins a new organization after resignation, then in that case, he cannot opt for that.
Please let me know if you need any further clarification.
Regards,
Pranab Chakraborty
9404384433
From India, Mumbai
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