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sachin agarwal (lawyer)     31 May 2013

Provident fund funda

The employer is required to contribute the following amounts towards Employees’ Provident Fund and Pension Fund:

In case of establishments’ employing less than 20 persons or a sick industrial (BIFR) company or ‘sick establishments’ or any establishment in the jute, beedi, brick, coir or gaur gum industry. –the employer contribution is 10% of the basic wages, dearness allowance and retaining allowance, if any.

In case of all other establishments’ employing 20 or more person- the employer contribution is 12% of basic wages, dearness allowance and retaining allowance, if any.

    A part of the contribution is remitted to the Pension Fund and the remaining balance continues to remain in Provident Fund account.
Ø    Where, the pay of an employee exceeds Rs.6,500 p.m., the contribution payable to Pension Fund shall be limited to the amount payable on his pay of Rs.6,500/- only.

   “Basic wages" means all emoluments which are earned by an employee while on duty or on leave or on holidays with wages in either case in accordance with the terms of the contract of employment and which are paid or payable in cash to him but does not include:

(i)    the cash value of any food concession;
(ii)    any dearness allowance, house-rent allowance, overtime allowance, bonus, commission or any other similar allowance.

(iii)    any presents made by the employer;

For the purposes of this section dearness allowance shall be deemed to include also the cash value of any food concession allowed to the employee.

Retaining allowance means an allowance payable for the time being to an employee of any factory or other establishment during any period in which the establishment is not working for retaining his services.


 3 Replies

sachin agarwal (lawyer)     31 May 2013

  That who will pay the provident fund contribution when the dispute was arise in in between the principal employer and the contractual l employer

Responsibility for the payment of provident fund contribution if the establishment who is providing security personal nor the establishment as the basis of contract and all the security guards were under the ultimate control of the first establishment and for the the security guards received their appointment letter and wages from the first establishment and the Department of provident fund has also been receiving the contributions from the first employer treating it as the employer of the principal to principal basis and the second employer cannot be termed as the principal employer.  And the court observed that the relationship between such a contractor and the establishment we have the manpower is supplied by him would be of the principal to principal and not that of employer-contract the the first employer walls liable to pay the Provident fund contribution in respect of the contractual employees.

Good Boy (None)     01 June 2013

there is no provision of PF in my company citing that they are engaged in marketing of Exported- Imported goods. there are 50+ empolyee in company including office & sales. some are getting PF & some are not. very few Ex employee got their PF due (who had PF account). but majority of people have no PF account. what to do? asking anything means sacking from service.

Sudhir Kumar, Advocate (Advocate)     01 June 2013

if contractor defaults he as well as Principal employer are liable for prosecution

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