Hello All, One of my friends has 18 employees at this moment and expected to touch the number of 20 within the next two months.
Can he start the coverage of Provident Fund from this month even with the employee strength of less than 20?
From India
Can he start the coverage of Provident Fund from this month even with the employee strength of less than 20?
From India
Section 1(4) of the EPF Act 1952 provides for voluntary coverage on acceptance of the request by CentralPF Commissioner. The provision is extracted below:
(4) Notwithstanding anything contained in sub-section (3) of this section or sub-section (1) of
section 16, where it appears to the Central Provident Fund Commissioner, whether on an application made to him in this behalf or otherwise, that the employer and the majority of employees in relation to any establishment have agreed that the provisions of this Act should be made applicable to the establishment, he may, by notification in the Official Gazette, apply the provisions of this Act to that establishment on and from the date of such agreement or from any subsequent date specified in such agreement.
So going by this provision first make a joint agreement with all employees for voluntary coverage and then approach the Central PF Commissioner for consent. The agreement with the employees shall indicate a date for commencement of PF applicability and thereafter deduct the contribution of employees and deposit it in a separate account along with employer share. Once the process is over the amount can be transferred to EPFO without incurring any additional liability.
From India, Mumbai
1422(4) Notwithstanding anything contained in sub-section (3) of this section or sub-section (1) of
section 16, where it appears to the Central Provident Fund Commissioner, whether on an application made to him in this behalf or otherwise, that the employer and the majority of employees in relation to any establishment have agreed that the provisions of this Act should be made applicable to the establishment, he may, by notification in the Official Gazette, apply the provisions of this Act to that establishment on and from the date of such agreement or from any subsequent date specified in such agreement.
So going by this provision first make a joint agreement with all employees for voluntary coverage and then approach the Central PF Commissioner for consent. The agreement with the employees shall indicate a date for commencement of PF applicability and thereafter deduct the contribution of employees and deposit it in a separate account along with employer share. Once the process is over the amount can be transferred to EPFO without incurring any additional liability.
From India, Mumbai
With the present strength of 18, you do not have to initiate necessary steps for PF coverage. But when the staff strength touches 20, then you have to take necessary steps for coverage under PF Act.
From India, Aizawl
From India, Aizawl
In my opinion keep the strength below 20 and do not go for PF as far as possible. It is more of a hassle. Give that additional amount to your employees additionally in hand. If salaries are above 15k then in any case neither PF deduction or employer PF is not compulsory as far as I know.
The number 20 is considered including contractual employee if any in your organization even if his PF compliance is taken care by the contractor. Please check the same ( may be office boy, sweeper, security staff etc.).
Even in future you are 20 and majority of your employees PF gross more than 15,000/- and only few are below 15,000/- , then also your organization will be covered under EPFO.
In actual if you are 18 after fulfilling all above conditions, you may apply for voluntary coverage.
S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions
From India, New Delhi
Even in future you are 20 and majority of your employees PF gross more than 15,000/- and only few are below 15,000/- , then also your organization will be covered under EPFO.
In actual if you are 18 after fulfilling all above conditions, you may apply for voluntary coverage.
S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions
From India, New Delhi
The establishment can take registration at the present strength of employee, if the management is keen to extend the facility to his employee. You ask your friend to discuss this matter with the management, the wish of your friend keeps no meaning. Establishments with less than 20 employees can take registration and the rate is 10% .
The management may not like to do so unless until his establishment comes under EPF purview, because management has to borne extra 10-12% is a matter of question during this pandemic situation. It would be good to wait till establishment reaches 20.
From India, Mumbai
The management may not like to do so unless until his establishment comes under EPF purview, because management has to borne extra 10-12% is a matter of question during this pandemic situation. It would be good to wait till establishment reaches 20.
From India, Mumbai
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Correction in names & other details of PF members 2.12.2013.pdf