Provident fund: Can an employer withdraw EPF balance after an employee leaves an organisation?

Hello, my basic pay was less than Rs 15,000 when I started my career. However, my employer deducted the PF amount every year. I worked for three years, and my EPF earnings were reflected in the EPF member passbook. However, a few years later, when I checked my EPF balance, I saw that my employer had withdrawn that amount after I left that organisation, and I wasn’t aware of it. Can an employer do this? I want to know if I can claim that amount or if it was wrongly deducted. Will I get a refund?

Reply by Radhika Viswanathan, Executive Director, Deloitte Haskins & Sells LLP

As per para 2(f) of the EPF scheme, an employee can be excluded from coverage by the PF regulations if the monthly pay is less than the wage ceiling prescribed (currently Rs 15,000). You have indicated that your basic pay was less than Rs 15,000 when you started your career. Accordingly, you were mandatorily required to be covered under PF, and your employer was right in deducting PF from your salary.

As per the PF regulations, an employee may withdraw accumulated balances under specified circumstances, and payment will be made only to the bank account of the member. Therefore, it is technically not possible for your employer to receive the money directly without your knowledge. However, you can raise a grievance/complaint to the concerned authority (jurisdictional PF office or to the trust) depending on whether your PF account was with the PF office or a private trust that your employer had. It may also be advisable to recheck your EPF passbook to see if you have availed any advance against your accumulated balance before raising a complaint.

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Reply by Amjad Khan, Executive Director - Employee Benefits Practice at Anand Rathi Insurance Brokers

An employer can never withdraw the EPF balance of an employee as it has absolutely no right to do so. The custodian of that money is the government, which adds interest to that balance, which only the employee can withdraw or his/her nominee can in case the primary holder passes away. Even in termination cases, no employer can attach that employee's EPF balance.

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