Dear Senoirs,
I Have a doubt on PF Contribution. A Employee was working in Company A his Basic+DA is greater than 6500RS. Employee is Contributing towards EPF & EPS in Company A.
He then resigns and takes up employment in Company B his Basic+DA is greater than 6500RS. Employee is saying that he doesn't want to contribute towards EPF & EPS quotes that ceiling is 6500Rs. Now is the employee duty bound to Contribute to EPF & EPS (earlier in Company employee was Contributing towards EPF & EPS) ?
Is Company B duty bound to deduct EPF & EPS?
Please guide me in this matter with supporting material in EPF Act. Am looking for solution in a legal perspective.
Regards
Suresh
From India, Bangalore
34I Have a doubt on PF Contribution. A Employee was working in Company A his Basic+DA is greater than 6500RS. Employee is Contributing towards EPF & EPS in Company A.
He then resigns and takes up employment in Company B his Basic+DA is greater than 6500RS. Employee is saying that he doesn't want to contribute towards EPF & EPS quotes that ceiling is 6500Rs. Now is the employee duty bound to Contribute to EPF & EPS (earlier in Company employee was Contributing towards EPF & EPS) ?
Is Company B duty bound to deduct EPF & EPS?
Please guide me in this matter with supporting material in EPF Act. Am looking for solution in a legal perspective.
Regards
Suresh
From India, Bangalore
If at the time of joining an establishment (say company B in our present example) the the salary of the employee (Basic+DA) is more than Rs 6500, he can be an excluded employee. But since he was previously covered under the EPF (when he was working in company A) and he has not withdrawn the benefits and closed the accounts, he is expected continue contributing towards PF.
Now, as far as the present employer is concerned, he can only rely on the words of the employee joining and inorder to make sure whether to include him or not, he has to collect a declaration (form 11) from the new joinee which declares that he has not been a member of PF(in case he was not a member earlier) or he has been a member of PF (if he was covered earlier) and if the declaration is that he has been a member of the PF, the present employer should also include him in to PF whatever be his salary and make arrangements to transfer his PF by issuing form 13.
Now it is upto the employee to decide whether to give a false declaration or to continue with PF.
Form 11 is attached.
Regards,
Madhu.T.K
From India, Kannur
Now, as far as the present employer is concerned, he can only rely on the words of the employee joining and inorder to make sure whether to include him or not, he has to collect a declaration (form 11) from the new joinee which declares that he has not been a member of PF(in case he was not a member earlier) or he has been a member of PF (if he was covered earlier) and if the declaration is that he has been a member of the PF, the present employer should also include him in to PF whatever be his salary and make arrangements to transfer his PF by issuing form 13.
Now it is upto the employee to decide whether to give a false declaration or to continue with PF.
Form 11 is attached.
Regards,
Madhu.T.K
From India, Kannur
Dear Madhu Sir,
Thank you so much for your reply.
Sir, in case the employee resigns from Company A and withdraws the benefits under EPF. At the time of joining the Company B he declares in form 11 that he was a PF member in Company A. His salary in Company B (Basic+DA) is greater than Rs 6500. In this case is the employee duty bound to Contribute to EPF & EPS (earlier in Company A employee was Contributing towards EPF & EPS)?
Is Company B duty bound to deduct EPF & EPS?
Regards
Suresh
From India, Bangalore
Thank you so much for your reply.
Sir, in case the employee resigns from Company A and withdraws the benefits under EPF. At the time of joining the Company B he declares in form 11 that he was a PF member in Company A. His salary in Company B (Basic+DA) is greater than Rs 6500. In this case is the employee duty bound to Contribute to EPF & EPS (earlier in Company A employee was Contributing towards EPF & EPS)?
Is Company B duty bound to deduct EPF & EPS?
Regards
Suresh
From India, Bangalore
In the above scenario he is an excluded employee. Normally before joining the company B there should be a gap of at least two months because the withdrawal forms (form 19 and form 10C) will be accepted by the EPF Organisation only when it is submitted two months after leaving the organisation. Please note that in form 19 there is a declaration of non employment to be given by the employee/ member that he has not been employed in an organisation to which PF Act applies. This two months waiting period is to ensure that if the employee joins another employer to whom PF applies, then he is not expected to withdraw the PF but is expected to transfer it to the new account.
The relevance of form 11 is also ensure this. As far as the new employer is concerned, he can rely on the declaration given by the employee and his past PF details cannot be checked in the present scenario and in the absence of a National Social Security Number which was planned but not introduced due to some technical reasons.
Regards,
Madhu.T.K
From India, Kannur
The relevance of form 11 is also ensure this. As far as the new employer is concerned, he can rely on the declaration given by the employee and his past PF details cannot be checked in the present scenario and in the absence of a National Social Security Number which was planned but not introduced due to some technical reasons.
Regards,
Madhu.T.K
From India, Kannur
Dear Madhu Sir, Thank you so much for your valuable reply. Your reply is very elaborate and filled with a lot of clarity which helps me in better understanding of EPF. Regards, Suresh
From India, Bangalore
From India, Bangalore
Super clarification given by Shri Madhu! Dear vijay,Please also clarify what will happen if an employer fails to collect form11 from the employee joined newly.
From India, Madras
From India, Madras
Dear Seniors,
Please correct me if am wrong on form 11.
@Ramachandran Sir, Form 11 is declaration by the employee stating whether he was/is a PF member with his previous employer. Its serves as a documentation if the new employer omits the new employee (on the consent with the employee) from EPF contribution. This form 11 serves as a written evidence in case of inspection from PF inspector on what basis the new employer has omitted the employee from PF contribution.
Previous post by Madhu sir, would answer whether the new employee can be omitted or included in EPF contribution and also about Form11.
(PF Contribution mandate if the salary of the employee Basic+DA is less than RS.6500).
Seniors, am also interested to know any penalties in case of failure to produce form 11 during inspection by PF inspector.
Regards,
Suresh
From India, Bangalore
Please correct me if am wrong on form 11.
@Ramachandran Sir, Form 11 is declaration by the employee stating whether he was/is a PF member with his previous employer. Its serves as a documentation if the new employer omits the new employee (on the consent with the employee) from EPF contribution. This form 11 serves as a written evidence in case of inspection from PF inspector on what basis the new employer has omitted the employee from PF contribution.
Previous post by Madhu sir, would answer whether the new employee can be omitted or included in EPF contribution and also about Form11.
(PF Contribution mandate if the salary of the employee Basic+DA is less than RS.6500).
Seniors, am also interested to know any penalties in case of failure to produce form 11 during inspection by PF inspector.
Regards,
Suresh
From India, Bangalore
There is no penalty if the employer omits to include one member on the basis of declaration given in form 11. Moreover, form 11 is not to be submitted to PF Office but is to be kept with the employer as proof that he has enquired the employee of his previous PF matters.
Regards,
Madhu.T.K
From India, Kannur
Regards,
Madhu.T.K
From India, Kannur
Dear Seniors,
Company XYZ pays sales incentive to employees on achieving sales target on a monthly basis. Is the payment of Incentive eligible for PF & ESI deductions?
Does Incentive fall under the purview of Definition of Basis wages/Wages as per EPF & ESIC Act?
To my knowledge i think Incentive is excluded from PF & ESI contributions. Your point of view will be highly appreciated.
Regards,
Suresh
From India, Bangalore
Company XYZ pays sales incentive to employees on achieving sales target on a monthly basis. Is the payment of Incentive eligible for PF & ESI deductions?
Does Incentive fall under the purview of Definition of Basis wages/Wages as per EPF & ESIC Act?
To my knowledge i think Incentive is excluded from PF & ESI contributions. Your point of view will be highly appreciated.
Regards,
Suresh
From India, Bangalore
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PF Contribution on Leave Encashment - Clarification by EPFO.pdf