Our organization is covered under the EPF Act as we have employed more than 20 employees. We have hired a contractor's services, but he has refused to pay provident fund by saying that the employees deputed in our organization have opted out of the scheme by filling Form 11, and he had attached Form 11 with the bills. However, the said Form contains only the self-declaration that these employees are presently not the members of such a scheme, but it has nothing that shows the disinterest of the employees. Our organization is ready to pay provident fund, but the contractor keeps on saying that it has no liability as the employees are not willing and their salaries are above INR 15,000.
In such circumstances, the issue is whether the EPF Act is not a mandatory Act. If yes, then will it not affect the core spirit of the social securities laws? As employees will be willing to take more salary at home.
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In such circumstances, the issue is whether the EPF Act is not a mandatory Act. If yes, then will it not affect the core spirit of the social securities laws? As employees will be willing to take more salary at home.
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Here is a multiple dimension of the issue. Form-11 under EPFO is for a declaration from the employee whether the employee was earlier a member of EPFO or not. There is no option for the employee's willingness to join as an EPFO member or not. If the employee was an earlier member, then to disclose all details including UAN number, etc.
If the employee was an earlier member of EPFO but discontinued joining a new organization as the PF gross is more than ₹15,000 per month, it is illegal. The employee should continue as an EPFO member.
If the employee is joining for the first time in any organization with more than ₹15,000 per month PF gross, the employee will be considered an excluded employee and will not be a member of EPFO. They may be a member of EPFO voluntarily subject to the agreement of PE.
In the instant case, the merit has to be judged based on the above conditions.
S K Bandyopadhyay (WB, Howrah) CEO-USD HR Solutions +91 98310 81531
USD HR Solutions – To strive towards excellence with effort and integrity
From India, New Delhi
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409If the employee was an earlier member of EPFO but discontinued joining a new organization as the PF gross is more than ₹15,000 per month, it is illegal. The employee should continue as an EPFO member.
If the employee is joining for the first time in any organization with more than ₹15,000 per month PF gross, the employee will be considered an excluded employee and will not be a member of EPFO. They may be a member of EPFO voluntarily subject to the agreement of PE.
In the instant case, the merit has to be judged based on the above conditions.
S K Bandyopadhyay (WB, Howrah) CEO-USD HR Solutions +91 98310 81531
From India, New Delhi
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Dear Sonkar,
As SK has explained, if the employee joins a new organization with a salary above 15,000 (basic + DA) and does not have an existing PF account (never had or closed it by withdrawing the money in it), then they may opt out of PF by claiming to be exempt employees. For this, the details are filed in Form 11.
If they fulfill the criteria, then you are not liable for the PF. If you follow that route, keep copies of all the documents and ensure that any new employee also falls into the same criteria, or they have to immediately register and pay the PF.
From India, Mumbai
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As SK has explained, if the employee joins a new organization with a salary above 15,000 (basic + DA) and does not have an existing PF account (never had or closed it by withdrawing the money in it), then they may opt out of PF by claiming to be exempt employees. For this, the details are filed in Form 11.
If they fulfill the criteria, then you are not liable for the PF. If you follow that route, keep copies of all the documents and ensure that any new employee also falls into the same criteria, or they have to immediately register and pay the PF.
From India, Mumbai
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EPF Act.ppt