Epf act

venkatesh rao (Querist) 15 December 2020 This query is : Resolved
Respected experts,
The EPF & MP Act provides it is compulsory to the establishments more fully explained in the Act and those below Rs.15000/= as wages should compulsorily be the members to the fund.
The Act further provides that the employees with more than Rs.15000/= are exempted. and they may join with the permission of employer and addl. commissioner of PF.
My query is my son getting more than 4 lakh per month in an IT company is also a member. He says that he did not volunteered but his HR professional said it is compulsory.
Will the experts be pleased to clarify.

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The EPF Act generally makes membership compulsory for establishments, with specific rules for employees earning over Rs. 15,000. While employees earning above this threshold were previously exempt or required employer and commissioner permission to join, recent court rulings, including the Supreme Court upholding a High Court decision, have struck down the 2014 amendment that created salary-based classes. However, the situation remains fluid pending a final Supreme Court verdict, impacting pension distributions for some.

Isaac Gabriel (Expert) 15 December 2020
It is compulsory and no exemption is allowed

venkatesh rao (Querist) 16 December 2020
Thank you Gabriel sir,
but law says about exempted employee; then how come it is compulsory when the exempted employee
has to get permission from Commissioner of PF and also his employer. This is what kept me in darkness.

kavksatyanarayana (Expert) 16 December 2020
To my best, as your son is drawing a salary higher than Rs. 15,000 per month, he will be called a non-eligible employee and it is not mandatory for such an employee to become a member of the EPF, although he can still register with the consent of his employer and approval from the Assistant PF Commissioner.

Rajendra K Goyal (Expert) 16 December 2020
He is member, means there was consent required as per law.

Dr J C Vashista (Expert) 17 December 2020
He should opt to join EPF.

K Rajasekharan (Expert) 17 December 2020
EPF Act 1952 and Employees Pension Scheme 1995 govern the deductions of employer’s and employees’ contributions to the pension scheme.

In 2014, an amendment was made to the EPS 1995 and it limited the scheme to employees drawing a salary below 15000 alone. Those who draw above 15000 are excluded from the scheme since 1 September 2014. So members joining since Sep 2014 need to get permission to be added to the scheme specifically.

Later in a writ in P Sasikumar & Ors v Union of India the High Court of Kerala struck down the 2014 amendment which created two classes of employees: one above 15000 and the others below 15000. The judgement was again upheld by the Supreme Court in EPFO & Anr v Sunil Kumar B & Ors.

It seems the Government of India filed some other petition in the SC in regard to this and EPFO is keeping the distribution of pension to the newly retired employees as they are waiting for the conclusive order of the SC.

Recently a set of employees field a contempt case against the implementation of the judgement in P Sasikumar & ors v Union of India and the High Court of Kerala in late October this year ordered that the pension to the petitioners should be given within two months or so. However the court pointed out that the HC judgement would be subjected to the SC decision in the pending SC case.

So as of now the 2014 amendment is nonexistent but it is dependent on the forthcoming SC verdict. So everything in this regard is in a fluid state as of now.

Message likes : 1 times

venkatesh rao (Querist) 18 December 2020
Thanks for the useful information of learned Expert K. Rajashakaran.

Rajendra K Goyal (Expert) 18 December 2020
Good post by expert K. Rajasekharan, thanks.

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