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M Parekh (Manager HR)     17 September 2011

PF deduction

Dear Group,

My query is:

We have acquired one business with the employee working in the previous company.

The earlier company only deduct PF @ 780 max. considering max. salary of 6,500/- i.e. any one above 6,500 , PF is only deducted on 6,500. We have recruited few employees from Market where their PF is on actual basic salary e.g. if Basic is 10000 than PF is1200 pm. Also with new year merit increase, we have changed the structure of staff and make everyone elgible PF on actual basic. But for workmen, we are still continue with old structure and practice of deducting PF only on 6,500.

My question is about two different practice in the company is OK or not?



Learning

 2 Replies

V. VASUDEVAN (LEGAL COUNSEL)     17 September 2011

Not okay. An employee drawing over 6500/- can opt himself to exclude from the provident fund scheme at the time of joining. However once he joins the scheme, the contribution cannot be restricted to the initial Rs.6500 and further you cannot have two sets of employees as illustrated

vasudevan


(Guest)

If the wages drawn is more than Rs. 6500/-, on intimation of the employee about his desire to contribute on the basis of the whole amount to Employees' Provident Fund Organisation, the employer can also contribute on the whole amount drawn as wages under intimation to Employees' Provident Fund Organisation.


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