M/s. ———————- Ltd.
Sub: Clarification for Minimum Wages – Deduction of P.F. – reg.
Please refer to your letter dated 23rd May 2015 regarding deduction of Provident Fund in respect of employees drawing Minimum Wages. In this connection, your attention is invited to the definition of “excluded employee” as defined in Para 2(f)(ii) of the E.P.F. Scheme, 1952. The clarification as sought for is given below in seriatim:
(i) The management is not legally bound to enroll an employee as member of the Fund who is drawing salary/pay exceeding Rs.15000.00 per month. In this connection, the word “Pay” as explained in the scheme and as shown below may please be kept in mind:
“Pay” includes basic wages with (dearness allowance, retaining allowance (if any), and cash value of food concession admissible thereon.
(ii) The management can restrict the P.F. benefit to the extent of Rs.15000/- per month. However, if both the employee and the management are agreeable to extent the benefit beyond Rs.15000/- , it can be extended beyond Rs.15000.00 as per provisions of Para 26(6) of the E.P.F. Scheme, 1952.
(iii) The management is not legally bound to extend benefit in respect of employees drawing salary/pay in excess of Rs.15000.00 per month. You have raised a query that earlier you have extended P.F. benefit in respect of employees drawing salary/pay in excess of Rs.15000.00 per month up to the salary limit of Rs.15000.00 per month and now how can you differentiate by not extending P.F. benefit in respect of newly enrolled employees. The reply should be, earlier the management extended extra benefit and presently the management decides to extent benefit strictly as per provisions of laws and the department can’t force to extend benefit to the excluded employee.
(iv) You can always extend more benefits to your employees. Please refer Para 26(6) of the E.P.F. Scheme, 1952.