Epf contribution reduction

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

28 May 2015 Hello,

We are revising salary structure of emloyees, as part of annual increments and wanted to check if, we can reduce contribution to EPF to Minimum Contribution as per Act, so that employees get more take home salary and burden of contribution on co. is also less,

Can we do so ?, if yes, pl refer the process, whether we have to get consent of employees , as per sec 9 of Industrial disputes act?

Pl also refer any recent case laws if available.

thanks,

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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28 May 2015 With the consent of the employees it can be reduced.

Querist : Anonymous

Querist : Anonymous (Querist)

28 May 2015 Hello Sir,,
what is the process and format of consent , if any ?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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28 May 2015 Issue 1

It is legally possible to reduce PF contribution by getting letters of acceptance from employees. As long as the members agree to the changed terms, PF Authorities will not raise any objection.

Issue 2

Changing terms and conditions unilaterally is not possible. Workmen are covered under Industrial Disputes Act 1947. Management need to give Notice for Change. After arriving at an agreement, the Management can change the deduction pattern. With other employees, even though, there is no legislation like Industrial Disputes Act, Indian Contract Act will be applicable. Hence any change in terms must be specified and the Management must get signature from the employees for agreeing to the changed terms.