Hello Everyone,
I work as an HR in an IT startup, please help answer few queries regarding the introduction of PF and ESIC to exsisting employees.
1. Does Employer have provision to ask all employees( with basic pay more than Rs. 15,000) to opt out for PF.
2. If an employee opt out for PF, can he/ she request to include it later.
3. Generally what is the steps taken by modern companies in case of PF and ESIC.
Thanking in advance.
From India, Ahmedabad
I work as an HR in an IT startup, please help answer few queries regarding the introduction of PF and ESIC to exsisting employees.
1. Does Employer have provision to ask all employees( with basic pay more than Rs. 15,000) to opt out for PF.
2. If an employee opt out for PF, can he/ she request to include it later.
3. Generally what is the steps taken by modern companies in case of PF and ESIC.
Thanking in advance.
From India, Ahmedabad
Hi Buddy,
1. Before proceeding to reply to your question I like to mention those employees who are not eligible to become PF member.
A. Employee having Basic+DA more than 15,000 Rs per month at the time of joining the organization.
B. Those employees withdrawn their PF before joining the organization
from the above condition we understood that employer have no role or ask his/her employer to opt out of PF unless above two condition arise.
2. Yes, They can unless their Basic+DA is under the wage ceiling.
3. Sorry - No answer.
With Regards
Mr.Thumbs Up
From India, Chennai
1041. Before proceeding to reply to your question I like to mention those employees who are not eligible to become PF member.
A. Employee having Basic+DA more than 15,000 Rs per month at the time of joining the organization.
B. Those employees withdrawn their PF before joining the organization
from the above condition we understood that employer have no role or ask his/her employer to opt out of PF unless above two condition arise.
2. Yes, They can unless their Basic+DA is under the wage ceiling.
3. Sorry - No answer.
With Regards
Mr.Thumbs Up
From India, Chennai
Mr. Thumbs up
Your post is misleading.
It is not that someone is not eligible for becoming a PF member.
Anyone can be a member of PF if they wish.
The concept of ineligibility is in ESIC where an employee can not be covered in ESIC after his salary crosses a certain limit.
From India, Mumbai
Your post is misleading.
It is not that someone is not eligible for becoming a PF member.
Anyone can be a member of PF if they wish.
The concept of ineligibility is in ESIC where an employee can not be covered in ESIC after his salary crosses a certain limit.
From India, Mumbai
First,
Once you have more than 19 employee, you are covered under PF.
You have to register even if all the employees opt out of PF.
You have to pay admin charges of ₹7.50 per month and file the returns anyway.
Now to your specific question :
Quote :
1. Does Employer have provision to ask all employees( with basic pay more than Rs. 15,000) to opt out for PF.
Unquote
There is no such provision. In fact that would be illegal.
You can explain to them that they have the option to opt out. But whether to opt out is their choice.
Those who don't opt out, you need to pay your share of PF in addition to existing CTC. CTC can't remain the same as its illegal to reduce take home salary to cover employers contribution of PF.
Further, anyone who has an existing PF account (from a previous job) can not opt out. He has to be covered.
If anyone opts out, you need form 11 to be filled and kept in your file.
Quote :
2. If an employee opt out for PF, can he/ she request to include it later.
Unquote
Yes, anyone who had earlier opted out, can always voluntarily register and be a member.
Quote:
3. Generally what is the steps taken by modern companies in case of PF and ESIC.
Unquote
Most large companies will just pay the PF. They encourage PF on the grounds that it helps save and create a retirement corpus
Thanking in advance.
Posted Yesterday
From India, Mumbai
Once you have more than 19 employee, you are covered under PF.
You have to register even if all the employees opt out of PF.
You have to pay admin charges of ₹7.50 per month and file the returns anyway.
Now to your specific question :
Quote :
1. Does Employer have provision to ask all employees( with basic pay more than Rs. 15,000) to opt out for PF.
Unquote
There is no such provision. In fact that would be illegal.
You can explain to them that they have the option to opt out. But whether to opt out is their choice.
Those who don't opt out, you need to pay your share of PF in addition to existing CTC. CTC can't remain the same as its illegal to reduce take home salary to cover employers contribution of PF.
Further, anyone who has an existing PF account (from a previous job) can not opt out. He has to be covered.
If anyone opts out, you need form 11 to be filled and kept in your file.
Quote :
2. If an employee opt out for PF, can he/ she request to include it later.
Unquote
Yes, anyone who had earlier opted out, can always voluntarily register and be a member.
Quote:
3. Generally what is the steps taken by modern companies in case of PF and ESIC.
Unquote
Most large companies will just pay the PF. They encourage PF on the grounds that it helps save and create a retirement corpus
Thanking in advance.
Posted Yesterday
From India, Mumbai
Further, an employee' needs to become a member of PF at the time of joining if he were a member of PF Scheme in his previous employment even if his wages exceed Rs.15000/- p.m.and the employee has to make declaration about his membership at the time of joining.
B.Saikumar
From India, Mumbai
B.Saikumar
From India, Mumbai
Pravin / THumbs Up,
You post says the following persons are ineligible / not eligible to be members of PF
There is no such concept.
There is nothing in any law that makes any employee ineligible to be a member of PF.
Instead the law provides an option to the employee (it's employee choice, not employer choice) to opt out from membership of PF under certain specified condition.
There is a huge difference between having the option of opting out of PF and being ineligible for PF.
From India, Mumbai
You post says the following persons are ineligible / not eligible to be members of PF
There is no such concept.
There is nothing in any law that makes any employee ineligible to be a member of PF.
Instead the law provides an option to the employee (it's employee choice, not employer choice) to opt out from membership of PF under certain specified condition.
There is a huge difference between having the option of opting out of PF and being ineligible for PF.
From India, Mumbai
Hi thumbs up,
Actually there is a lot of conditions under which employees and even employers are exempt. Not what you asked specifically, but most of us forget it. So putting it down here for knowledge and reference of members.
<link no longer exists - removed>
The rest I need to find the specific section you want. It's in office will post that later. The terms are similar to what you posted, but it's an opt out not a disallowance
From India, Mumbai
Actually there is a lot of conditions under which employees and even employers are exempt. Not what you asked specifically, but most of us forget it. So putting it down here for knowledge and reference of members.
<link no longer exists - removed>
The rest I need to find the specific section you want. It's in office will post that later. The terms are similar to what you posted, but it's an opt out not a disallowance
From India, Mumbai
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HC All - Trainees not covered for PF -2010.pdf
PF Ledger.xls