Dear Friends,
Is it permissible if an employee's basic salary is reduced while formulating the increments? If it is an unavoidable situation, is there any case law that prohibits the reduction of the current basic salary?
Regards,
PBS KUMAR
From India, Kakinada
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592Is it permissible if an employee's basic salary is reduced while formulating the increments? If it is an unavoidable situation, is there any case law that prohibits the reduction of the current basic salary?
Regards,
PBS KUMAR
From India, Kakinada
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Well, Mr. Kumar, this question has already been raised and discussed here in this place. Please visit the below posted weblinks:
- https://www.citehr.com/133851-can-ba...y-reduced.html
But I don't think one should go for a deduction in Basic salary instead of making deductions in other allowances if it is required. Also, there is no such rule, and I have never come across that you can't reduce the Basic salary.
From India, Gurgaon
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- https://www.citehr.com/133851-can-ba...y-reduced.html
But I don't think one should go for a deduction in Basic salary instead of making deductions in other allowances if it is required. Also, there is no such rule, and I have never come across that you can't reduce the Basic salary.
From India, Gurgaon
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Unless it goes below the basic prescribed in min. wages. No law is protecting the reduction in basic I think. Let us the opinions of lawyers in this forum. Pon
From India, Lucknow
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From India, Lucknow
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Dear PBS Kumar,
Sec 12 of EPF states: "Employer not to reduce wages, etc." No employer, in relation to an establishment to which any Scheme or the Insurance Scheme applies, shall, by reason only of their liability for the payment of any contribution to the Fund or the Insurance Fund or any charges under this Act or the Scheme or the Insurance Scheme, reduce, whether directly or indirectly, the wages of any employee.
Regards,
Rahul Bagale
From Korea
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Sec 12 of EPF states: "Employer not to reduce wages, etc." No employer, in relation to an establishment to which any Scheme or the Insurance Scheme applies, shall, by reason only of their liability for the payment of any contribution to the Fund or the Insurance Fund or any charges under this Act or the Scheme or the Insurance Scheme, reduce, whether directly or indirectly, the wages of any employee.
Regards,
Rahul Bagale
From Korea
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Dear Rahul Saab, Not only PF but also gratuity gets affected by reduction in Basic. so also has to be taken into consideration.
From India, Pune
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From India, Pune
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Here is the act:
Section 12 - EPF - Employer not to reduce wages, etc.
No employer in relation to an establishment to which any Scheme or the Insurance Scheme applies shall, by reason only of his liability for the payment of any contribution to the Fund or the Insurance Fund or any charges under this Act or the Scheme or the Insurance Scheme, reduce whether directly or indirectly, the wages of any employee to whom the Scheme or the Insurance Scheme applies or the total quantum of benefits in the nature of old age pension, gratuity, provident fund, or life insurance to which the employee is entitled under the terms of his employment, express or implied.
[EPFO](http://epfindia.nic.in) [<link updated to site home>]
From India, Gurgaon
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Section 12 - EPF - Employer not to reduce wages, etc.
No employer in relation to an establishment to which any Scheme or the Insurance Scheme applies shall, by reason only of his liability for the payment of any contribution to the Fund or the Insurance Fund or any charges under this Act or the Scheme or the Insurance Scheme, reduce whether directly or indirectly, the wages of any employee to whom the Scheme or the Insurance Scheme applies or the total quantum of benefits in the nature of old age pension, gratuity, provident fund, or life insurance to which the employee is entitled under the terms of his employment, express or implied.
[EPFO](http://epfindia.nic.in) [<link updated to site home>]
From India, Gurgaon
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And to know the difference between Wages and Basic, please go thru the link <link no longer exists - removed>
"Wages" which is been used under this Section 12 of THE EMPLOYEES’ PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952 is different with Basic and it is paid to employees working on hourly basis, daily basis or for a few day on replacement of any employee. Wages if paid on monthly basis it must follow Minimum wages according to that particular state. Also i have attached a doc for further understanding on this..
From India, Gurgaon
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"Wages" which is been used under this Section 12 of THE EMPLOYEES’ PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952 is different with Basic and it is paid to employees working on hourly basis, daily basis or for a few day on replacement of any employee. Wages if paid on monthly basis it must follow Minimum wages according to that particular state. Also i have attached a doc for further understanding on this..
From India, Gurgaon
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Normally, wages cannot be reduced, as has already been enumerated above. However, there have been a few dynamic cases wherein CEOs have reduced salaries by 30-50% across the board instead of reducing headcount. In cases involving mergers, terms and conditions are also changed.
From India, Delhi
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From India, Delhi
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Salary & Compensation Guidelines.zip