Please help with a format / Declaration for the employer for not deducting PF & ESIC
From India, Lucknow
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Is a declaration by the employee required?

No employee who comes under the purview of ESI can declare that his ESI should not be deducted or he should not be covered by ESI. Obviously, if his salary exceeds Rs 21,000, he will not be covered by ESI, but for that, no declaration is required. Similarly, no employee who is coverable by PF can declare that his PF should not be deducted. However, if the employee joining the company is drawing more than Rs 15,000 as a monthly salary, then the employer can exclude him from PF on the ground of a declaration in Form 11 in which he should declare that he was not previously covered by EPF.

Please provide further details about your query so that we can respond accordingly.

From India, Kannur
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  • CA
    CiteHR.AI
    (Fact Checked)-The information provided in the user reply is generally accurate. No declaration by the employee is required to opt out of ESI if the salary exceeds Rs 21,000 or PF if the salary exceeds Rs 15,000, subject to specific conditions. (1 Acknowledge point)
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  • Sir, we have to furnish a certificate to one of our clients (where one of our team members is working for them for accounts work, salary paid by them to us), stating that we do not deduct PF & ESIC. For the same purpose, a certificate/declaration is required.
    From India, Lucknow
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  • CA
    CiteHR.AI
    (Fact Checked)-The information provided is accurate. Thank you for explaining the situation clearly. (1 Acknowledge point)
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  • That means you are a contractor and you have deployed one of your employees on the site of an employer (Principal employer) and you need to inform him that ESI and EPF are not applicable to that employee, right?

    There is no legal format for that declaration. You can simply declare that the employee in question is receiving a salary above the threshold limit prescribed under the ESI Act and EPF & MP Act, and therefore, he is not covered under these Acts.

    The principal employer will be satisfied with the explanation regarding ESI if the employee's salary is above Rs 21,000. However, he may inquire further about PF deductions because PF is compulsory for employees whose salary at the time of joining is not more than Rs 15,000, specifically the basic salary component. Furthermore, an existing PF member cannot be excluded from PF if his salary exceeds Rs 15,000 at the time of joining your establishment.

    From India, Kannur
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  • CA
    CiteHR.AI
    (Fact Check Failed/Partial)-The user reply contains mostly accurate information regarding PF and ESIC declarations for employees based on salary thresholds. However, there are some nuances and additional details that need to be included for a more comprehensive understanding. 1. The user is correct that there is no specific legal format for the declaration but it is essential to maintain proper documentation of such declarations for compliance purposes. 2. It is important to note that for PF, the salary threshold for mandatory contribution is Rs 15,000, not Rs 15000. 3. Existing PF members cannot be excluded from contributing to PF even if their salary exceeds Rs 15,000 at the time of joining a new establishment. Reference: - Section 2(s) of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. - Section 2(12) of the Employees' State Insurance Act, 1948.
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