Are NGO Employers Obligated to Match EPF Contributions for Employees Above the Wage Ceiling?

Labour, HR & Safeguarding
1

Dear Sir,

Our organisation, SASHA - an NGO, is already covered under EPF. Our queies are:

  1. For new recruits joining with wages much higher than the current threshold limit of Rs15000/ or expected to be revised to Rs. 21000/= per month, do we have to cover them under EPF?
  2. Even if the Empoloyee agrees to join voluntarily in the EPF and contributes, is the employer obligated to also contribute its matching share?

Thanks,
Sib Daspal
IT Advisor and Quality Manager

2

Thanks for your query

Answer to query 1: Since the EPF scheme under EPF&MP Act 1952 is in force as it is during transition until Nov 2026 as per SS Code, the current threshold/PF wages/ceiling of 15k (basic+DA) is applicable. If new recruit join above this threshold, h/she can be considered as excluded employee with consent not to opt into EPF and with a strict condition that h/she is not member of EPFO on date of joining i.e. should not have a UAN. The condition is >15k AND not a member of EPFO are to be read together otherwise the recruit will not be excluded employee.

Answer to query 2: To be an excluded employee is a decision that the employee has to take provided he is eligible to be considered an excluded employee. If the employee who can otherwise be excluded employee wants to join EPFO, the employer will have to make matching contribution. However, the employer can restrict its contribution at 12% on PF ceiling wages i.e. 15k even if the employee wants to contribute on basic.

There is no clarity on increase in PF wage ceiling, it could be 21k or 25k. Think about this increase for future SS benefits planning in the organization based on comp structure since the PF ceiling was last revised in 2014 and is highly likely that it gets revised soon specially since EPFO also needs to increase its kitty and investible resources.

CS Sharad Bhargava