Dear all
we are a small Charitable trust registered at Jaipur in Rajasthan and having employees ranging between 18-25 depending upon the projects and availability of funds. We had PF and we were regularly complying all PF norms. Two years back we introduced our personal systems including a salary structure and also introduced gratuity. All of us know that in last year we years funding scenario has changed a lot and in this financial year 2015-16 our main funding from CSR has also shrunk significantly. Therefore the DST cost (Development Support Team cost) and OH costs also impacted as it was directly linked in percentage of programme funds. Now we discussed this issue with our staff and after discussion we arrived at consensus to maintain basic and pay only the take home as salary and stop PF deduction and submission of organisational contribution also.
All employees voluntarily gave their agreement to this decision in writing. Now we are wondering is it correct? what are the implications of it. Kindly give suggestions and advise pl.
Looking forward for your guidance
warm regards
Asif Zaidi
Dear Asif,
Once an organisation is registered under EPF, whether voluntarily or otherwise, one must continue to comply with PF regulations. Stopping PF compliance that is deposit of PF contributions (employees & employer’s) is a default. It may be noted that the responsibility of compliance with EPF Act is that of the employer, and hence implications of any non-compliance would also be faced by the employer.
Whether de-registration from EPF is possible ? Only Commissioner PF has power to exempt (S.17) an organisation, which it considers employees are getting better benefits than prescribed under the EPF Act.