Dear HR,
Regarding the implementation of recent amendments in PF contributions as per the Honorable Supreme Court rulings, does the employer have the right to maintain the same CTC (by reducing one of the allowances) while deducting employees' contributions and depositing an equal contribution in the employee's PF account as per the ceiling of Rs. 15,000 (on Gross - HRA amount).
Rakesh Shinde
8308500655
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1Regarding the implementation of recent amendments in PF contributions as per the Honorable Supreme Court rulings, does the employer have the right to maintain the same CTC (by reducing one of the allowances) while deducting employees' contributions and depositing an equal contribution in the employee's PF account as per the ceiling of Rs. 15,000 (on Gross - HRA amount).
Rakesh Shinde
8308500655
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Hi RakeshS,
As far as I know, any restructuring, mainly, especially with a view to limit or reduce the contribution to EPF account, is not acceptable legally or logically. It's up to you to come out clean regarding any restructuring you undertake, ensuring that it is not aimed at purposely negating the implications of the recent judgment of the Supreme Court. However, for those earning more than 15k, there is no impediment like this.
From India, Bangalore
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As far as I know, any restructuring, mainly, especially with a view to limit or reduce the contribution to EPF account, is not acceptable legally or logically. It's up to you to come out clean regarding any restructuring you undertake, ensuring that it is not aimed at purposely negating the implications of the recent judgment of the Supreme Court. However, for those earning more than 15k, there is no impediment like this.
From India, Bangalore
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Hi RakeshS,
Please note the following provisions extracted from the EPFMP Act -
[12. Employer not to reduce wages, etc. -
No employer, in relation to an establishment to which any Scheme or the Insurance Scheme applies, shall, by reason only of their liability for the payment of any contribution to the Fund or the Insurance Fund or any charges under this Act or the Scheme or the Insurance Scheme, reduce, whether directly or indirectly, the wages of any employee to whom the Scheme or the 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.]
Please let me know if you need any further clarification.
Thank you.
From India, Bangalore
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Please note the following provisions extracted from the EPFMP Act -
[12. Employer not to reduce wages, etc. -
No employer, in relation to an establishment to which any Scheme or the Insurance Scheme applies, shall, by reason only of their liability for the payment of any contribution to the Fund or the Insurance Fund or any charges under this Act or the Scheme or the Insurance Scheme, reduce, whether directly or indirectly, the wages of any employee to whom the Scheme or the 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.]
Please let me know if you need any further clarification.
Thank you.
From India, Bangalore
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PF Contribution on Leave Encashment - Clarification by EPFO.pdf