With the increase in the PF wage ceiling from Rs.15,000/- per month to Rs. 25,000/- per month w.e.f. 17.09.2026, a question that has been crossing the minds of various HR professionals is whether the increased PF costs can be set off against the non-wage components of an employee’s salary. By way of illustration, the manner in which companies are trying to recover increased costs is as follows:
It would be necessary to analyse a few provisions of the Code on Social Security, 2020 (“CoSS”, hereinafter) read with the Employees’ Provident Funds Scheme, 2026 (“EPF Scheme, 2026”, hereinafter). Section 124 of the CoSS provides that the employer cannot directly or indirectly reduce the wages of an employee or the benefits which an employee is entitled to under the terms of his express or implied employment terms, solely for avoiding responsibility of paying contributions or charges under the CoSS. Since section 124 of the CoSS is similar to section 12 of the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 (“EPF...
