Employee’s Provident Fund Act
Applicability of PF Act:
Employer – Provident Fund Act applies to factories and other notified establishments employing 20 or more persons. Once an establishment is covered, its departments and branches, wherever they are, are covered. Once establishment is covered, it continues to get covered even if employment goes below 20.
Employee – Every employee employed in or in connection with the work of a factory or other establishment to which this scheme applies, other than an excluded employee (an employee who, having been a member of the Fund, withdrew the full amount of his accumulations in the Fund or an employee whose pay at the time he is otherwise entitled to become a member of the Fund, exceeds Rs. 15,000/- pm), shall be entitled and required to become a member of the Fund from the day this paragraph comes into force in such factory or other establishment.
The contributions payable by the employer under the Scheme shall be at the rate of 12% of the pay payable to each employee to whom the Scheme applies.
The contribution payable by the employee under the Scheme shall be equal to the contribution payable by the employer in respect of such employee. Any employee, if he desires, make contribution of an amount exceeding 12% of his pay under the Scheme. However the employer shall not be under an obligation to pay any contribution over and above his contribution payable under the Act.
In respect of employees employed by or through a contractor, It shall be the responsibility of the principal employer to pay both the contribution payable by himself in respect of the employees directly employed by him. The contractor shall recover the contribution payable by such employee and shall pay to the principal employer the amount of member’s contribution so deducted together with an equal amount of contribution and also administrative charges.