Provident Fund for New Joinees

This query is : Resolved

Raghavendra (Querist)
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26 October 2010 An employee joins a company for a salary more than Rs. 6500 (PF applicable limit) and he was participating in PF in his previous organisation.

Now, the questions are,

1. Should the new Employer deduct PF for this employee though his salary is above the limit?
2. If the Employee is not ready for joining the PF in this new company, should the employer still need to pay Employer's portion of 12% because he was with PF in his previous company?

It will be good to get a detailed reply on this. Thank you in advance for your support,

Raghu.

CA Shailesh Kumar Bhagat

CA Shailesh Kumar Bhagat (Expert)
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26 October 2010 Compulsory Membership. It is obligatory for all employees drawing salary upto Rs 6500/- per month to become member of EPF as stated in para 4 above. Employees drawing salary more than Rs 6500/- per month at the time of appointment fall in the excluded category and it is not obligatory for the management to contribute towards EPF for such employees.

Membership by Mutual Consent. Employees whose pay scales are more than Rs 6500/- per month (Basic + DA) may become members of EPF by mutual consent of employees and employer. It is not obligatory for the employer to give consent and contribute for employee drawing salary more than Rs 6500/- per month. However if the employer gives the consent, matching contribution has to be made by the employer subject to salary ceiling limit of Rs 6500/- per month. But once an employee becomes a member, with mutual consent, it would be mandatory for the employee to continue as member.

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