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Rahul Sharma (CMA)     08 April 2016

Mysterious pf query

Hi All, i recently joined a MNC co. as accounts head. At present our company's policy for payroll processing is as follows. 1. Company processes payroll by taking 20th of the month as cut off date by taking full month in account. Suppose in the month of jan:X did not take any leave upto 20th of jan than his jan effective days for payroll will be counted as 31 days(Actual days from 01jan to 20th jan = 20 days + Provison days from 21th jan to 31th jan= 11 days=31 days for Jan Payroll. Reason for adopting this to release salary on time. For New Joinees who joined before 20th of the relevant month 2. Employee joined upto 20th of the month: his payroll will be processed in the same month and pf deduction will be made in the same month accordingly.salary will be released in the same month Example: Shyam joined on 10th of the jan.his payroll will be processed in jan with 22 effective payroll days(based on point no.1 i.e actual 11+Provisonal 11=22 payroll days. For New Joiinees who joined (after 20th of the relevant month)the follows 3. Employee joined after 20th of the month: his payroll will be processed in the next month and pf deduction will be made in the next month accordingly. Example: Shyam joined on 21th of the jan his payroll will be processed in Feb with 11 effective payroll days for the month of jan. salary will be released in feb (jan+feb combined) Query: 1.Now my query is by adopting this policy has company made any violation under the provisons of pf act. 2.When the liablity to deduct pf will arise in point 3. as per law.end of jan itself or (end of feb as per current policy). Please share your valuable comments Thanks


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 7 Replies

Rahul Sharma (CMA)     08 April 2016

Hi All, I recently joined a MNC co. as accounts head. At present company's policy for payroll processing is as follows. 1. Company processes payroll by taking 20th of the month as cut off date by taking full month in account. Example: Suppose in the month of jan:X did not take any leave upto 20th of jan than his jan effective days for payroll will be counted as 31 days(Actual days from 01jan to 20th jan = 20 days + Provison days from 21th jan to 31th jan= 11 days=31 days for Jan Payroll. Reason for adopting this to release salary on time. ___________________________________________________________________________________________ A. For New Joinees who joined before 20th of the relevant month ___________________________________________________________________________________________ 2. Employee joined upto 20th of the month: his payroll will be processed in the same month and pf deduction will be made in the same month accordingly.Salary will be released in the same month Example: Shyam joined on 10th of the jan.his payroll will be processed in jan with 22 effective payroll days(based on point no.1 i.e actual 11+Provisonal 11=22 payroll days. ___________________________________________________________________________________________ B. For New Joinees who joined (after 20th of the relevant month) ___________________________________________________________________________________________ 3. Employee joined after 20th of the month: his payroll will be processed in the next month and pf Deduction will be made in the next month accordingly. Example: Shyam joined on 21th of the jan his payroll will be processed in Feb with 11 effective payroll days for the month of jan. Salary will be released in feb (jan+feb combined) ___________________________________________________________________________________________ Query: 1. Now my query is by adopting this policy has company made any violation under the provisons of pf act. 2. When the liablity to deduct pf will arise in point 3. as per law.end of jan itself or (end of feb as per current policy). Please share your valuable comments Thanks

Kumar Doab (FIN)     08 April 2016

You have posted your private and internal policy.

It has not been made clear the MNC is; Commercial/Industrial.

As per the applicable Act the pay day is fixed e.g. 7th/10th of subsequent month.

 

Thus any person irrespective of DOJ has to be paid by 7th/10th of subsequent month.

Apparently due to the private and internal policy, joinee whose DOJ is after 20th is not paid on the  7th/10th of subsequent month.............................and PF contribution is also neither processed nor paid till next to next month.

 

Thus there is a lapse.

 

How the authorities under say Shops & Estbs Act, Payment of Wages Act, Min. Wages Act/Rules, PF, ESIC etc shall view it is upto them.

 

 

 

 

Rahul Sharma (CMA)     09 April 2016

Thanks for giving your valuable suggestion.I am awaiting another valuable Suggestion !........

parul bhatia   11 April 2016

Hi,

I was working with a private company in which there are more tham 50 employees and do not have any policy of PF. They are giving it to some people and rest are not being given. Can we file a case against this. Also for the maternity, they dont follow the poilcy of govt. They have their own policy which is that they will give 3 months leave but salary only of 1 month and that to in 12 installments after joining the office. can we do something against this in labour court.

Please help.

Kumar Doab (FIN)     11 April 2016

@ Parul,

PF: The PF wages i.e. upto which employer has to provide PF contribution is well document for each year and is available with HR/employer, EPFO.............

www.epfindia.gov.in

You can speak to PRO/APFC in the nearest PF office.In case of any violation submit written complaint preferably by letter thru Reg. Post and pursue thru RTI.

 

Maternity Benefits: Are well documented in Maternity Benefit Act. The benefits include 6 weeks prior to pregnancy delivery (payable in advance),  6 weeks after pregnancy delivery (payable within 48 hours on producing proof), Maternity bonus, addittional 30days maternity benefit if pregnanct woman suffers sickness due to pregnancy delivery...........

 

The Act and excerpts should be displayed at a conspicious place in establishment.

You can lodge complaint with Inpector (State/Central as applicable in your case) appointed under the Act.

parul bhatia   11 April 2016

HI,

Further to the above reply, as i can understand regarding the maternity, the govt rules applies to the private sector also? Wether the policy being provided by the company is diff which is mentioned in the apointment letter?

please advise

Kumar Doab (FIN)     11 April 2016

The private compnay has to ensure compliance to the Act/Rules and can be penalized in case of violation.

 

It is indeed disapointing to note that younger generation employees are ill informed.

 

 

It is because they do not take up or participate in unions/forums while in college and later while in employment.

 

The employee's unions/trade unions can also be approached for support.

 

Your elders in the family, and an able Labor Law Consultant can guide you further.

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