EPF - Case that we won on the definition of Excluded employees.
We have won a case against a demand order issued by the EPFO for a very large sum, based on their interpretation of excluded employees. Thought to share my experience which may help some of you facing EPF challenges.
As per the rules, employees with more than 15,000 may be excluded from the EPF schemes if the employee wants to be excluded. But the EPF office charged us stating some of the excluded employees cannot be excluded as their Basic component in salary structure is less than 15K. However, we contested that the Medical allowance, Conveyance allowance,?Special allowances and other allowances which are universally paid to all employees should be considered for arriving at the total basic wages which amounts to even 40K- 50K and not 15K. After many hearings at the EPFO, the commissioner refused to accept our argument stating that no allowances, except dearness allowance, can be accepted. He passed an order to pay a very large sum.
I'm writing this blog, because many experts, consultants and HR heads advised me that I'm at fault and that allowances cannot be added as part of the basic wages. Few consultants even suggested the corrupt means to resolve the issue. We were confident in our interpretation of the law. Hence, we decided to file a case against the order, in the Central Government Industrial Tribunal cum Labour Court. After many hearings,?the court accepted that all allowances that are universally paid to all employees should be accepted as part of the total paid wages, and held that the commissioner's order is illegal.
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Point to be highlighted, we did not use a PF consultant to contest during the EPF commissioner enquiry, I contested myself, even though I had to read a lot in the law. At the court I did not go with a lawyer with previous EPF experience, rather went with one who did not contest EPF cases before. I thank and appreciate him for accepting my interpretation and agreeing to fight. Both the consultant as well as lawyers with experience suggested that I'm at fault and I better not waste money in the court.
So in case you face a similar issue please contact me, I may be of some help.
TA | HRBP | Corp HR Ops | C&B | HR Analytics | ERP
1 个月I found a big flaw in this statement - "the commissioner refused to accept our argument stating that no allowances, except dearness allowance, can be accepted". In fact, all allowances can be considered except HRA for the definition of wages. Secondly, In case if we want to register more than 15k employee - It actually matters what amount you will enter while doing UAN registration for new joiner under EPF wages at the time joining, is it 15000 or more! If we enter 15000+ join declaration to be submitted under para 26(6). Third, If an employee withdraws his/her complete pension & PF under 10years and join with 15k+ wages, EPS to to avoided and entire 24% contribution to be made to EPF account only .
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2 年Great
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2 年This is really encouraging. Thanks for sharing. I'll be reaching out to you for some guidance on a similar issue.
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2 年Thanks for sharing this. Good information