PF ceiling to be decreased from 20 to 10 employees as per recommendation to labour ministory - Professionals - HR - TIK Share
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PF ceiling to be decreased from 20 to 10 employees as per recommendation to labour ministory


CA Pulkit Sharma

2014-06-26

Government is in process to reduce the minimum number of employees from 20 to 10. The reduction in limit will bring around 50 Lakh employees in Provident Fund scheme. Currently establishments employing 20 or more than 20 are required to compulsory enroll under EPFO.

Even the letter from EPFO to labour department has recommended that definition of employee, employer and basic wages should be redifined.

The aim of these amendments is to provide social security to more and more employees. Additional 50 lakh employees will be covered under EPFO if these amendments are implemente.

Rahul Rai

2014-06-26

Though the intention of the EPFO is right by covering another 50 Lakh employees. But, the basis on which establishment need to comply is not correct.

For example, suppose 12 friends started a company with 1,00,000 Rs.. Since the number of employees crossed 10, they would be covered under EPFO and they have to comply with law.

But, are they in a position to pay consultant for PF compliances. My point is that the basis should be monetary and not number of employees.

There should be a monetary condition like turnover more than 1 crore or capital more than 50 lakh.

It is not possible for the small organisations employing more than 10 people to incure extra cost on consultants and administration of compliances.

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