Good Day All seniors is and experts.
I have One query . In Maharashtra, minimum wage as follows :
Basic 10260 + DA (special allowance) 2444 = 12704
1. On which amount to calculate PF? ( Only BAsic Or whole Rs.12704)
2. If I have to pay this Rs.12704 , do i need to follow the SAME Basic and Allowance or I can structure it as per my convenience? Means is possible to bifurcate this (₹12704) into various parts, for example【Basic 5000+ special allowance 6000 +. Conveyance 1000+ other 704】? If yes, then on which, pf to calculate?
From India, Mumbai
I have One query . In Maharashtra, minimum wage as follows :
Basic 10260 + DA (special allowance) 2444 = 12704
1. On which amount to calculate PF? ( Only BAsic Or whole Rs.12704)
2. If I have to pay this Rs.12704 , do i need to follow the SAME Basic and Allowance or I can structure it as per my convenience? Means is possible to bifurcate this (₹12704) into various parts, for example【Basic 5000+ special allowance 6000 +. Conveyance 1000+ other 704】? If yes, then on which, pf to calculate?
From India, Mumbai
1
You should pay PF on the gross salary, ie, Basic and DA (Special allowance)
In whatever manner you bifurcate, the salary as per minimum wages notification is the statutory salary on which PF will be payable. Not only PF but other payments like ESI, Bonus, Gratuity, Leave encashment etc should be based on that salary only.
From India, Kannur
In whatever manner you bifurcate, the salary as per minimum wages notification is the statutory salary on which PF will be payable. Not only PF but other payments like ESI, Bonus, Gratuity, Leave encashment etc should be based on that salary only.
From India, Kannur
The BASIC mentioned in Minimum Wages is the basic rate of wages and it is not BASIC WAGES as defined under EPF Act. The two are different and are not mirror image of each other.
Bifurcation of Minimum Wages into components has been upheld by the Apex Court in the year 2019.
From India, Noida
Bifurcation of Minimum Wages into components has been upheld by the Apex Court in the year 2019.
From India, Noida
Basic and DA notifies in the notifications is the minimum wages on which statutory deductions are made.except for esic.
From India, Vadodara
From India, Vadodara
You have to calculate on ₹12704/- You can not lower down the basic₹10260/- and DA. Any bifurcation on Basic and DA under minimum wages is a crime.
From India, Mumbai
From India, Mumbai
Please refer to the judgment of Supreme Court in the case of Hindustan Sanitary-ware pronounced in the year 2019, where it is stated that there is no bar on bifurcation of Minimum Wages. In this regard also please refer to the judgments of High Court of Punjab and Haryana as also High Court of Delhi where it is categorically mentioned that it is not mandatory on the part of the Employer to pay PF on Minimum Wages. These judgments forced the EPFO to issue circulars in the year 2011 where their directive to pay PF on Minimum Wages was put in abeyance. A similar judgment has been passed recently in January 2023 by High Court of Madras. It may not be out of place to inform that a SLP filed by EPFO in Apex Court is pending since 2011-2012.
It is reiterated that in Minimum Wages Act it is the Basic Rate of Wages and not BASIC WAGES as is defined under PF Act
From India, Noida
It is reiterated that in Minimum Wages Act it is the Basic Rate of Wages and not BASIC WAGES as is defined under PF Act
From India, Noida
Split is allowed where payment is made above the MRW notified. But disallowed splitting, where payment is equal to MRW....................... Refer the following
0n 29 April 2019, the Supreme Court of India (Supreme Court) in Hindustan Sanitary-ware and Industries Limited and Ors v State of Haryana, Civil Appeal Nos. 2539 of 2010 and 4454 of 2019 (Hindustan Sanitaryware) ruled on the validity of the minimum wages notification dated 21 October 2015 issued by the Department of Labour, Government of Haryana (Notification). The ruling is significant when viewed from the standpoint of the powers of the appropriate government under Section 4 of the Minimum Wages Act 1948 (MW Act). In relation to segregation of components of wages, the Supreme Court has reiterated its judgment in Airfreight, where it held that when an employer is paying a total sum which is equal to or higher than the minimum rates of wages fixed under the Minimum Wages Act, the employer would be in compliance with the Minimum Wages Act, provided that such wages are calculated in accordance with Section 2(h) thereof.
"Once rates of minimum wages are prescribed under the Act, whether as all-inclusive under Section 4(1)(iii) or by combining basic plus dearness allowance under Section 4(1)(i), are not amenable to split up. It is one pay package. Neither the scheme nor any provision of the Act provides that the rates of minimum wages are to be split up on the basis of the cost of each of the necessities taken into consideration for fixing the same."
In other words, if the remuneration paid to the employees is equal to or more than the minimum rates of wages, the employer has complied with the law in substance.
From India, Mumbai
0n 29 April 2019, the Supreme Court of India (Supreme Court) in Hindustan Sanitary-ware and Industries Limited and Ors v State of Haryana, Civil Appeal Nos. 2539 of 2010 and 4454 of 2019 (Hindustan Sanitaryware) ruled on the validity of the minimum wages notification dated 21 October 2015 issued by the Department of Labour, Government of Haryana (Notification). The ruling is significant when viewed from the standpoint of the powers of the appropriate government under Section 4 of the Minimum Wages Act 1948 (MW Act). In relation to segregation of components of wages, the Supreme Court has reiterated its judgment in Airfreight, where it held that when an employer is paying a total sum which is equal to or higher than the minimum rates of wages fixed under the Minimum Wages Act, the employer would be in compliance with the Minimum Wages Act, provided that such wages are calculated in accordance with Section 2(h) thereof.
"Once rates of minimum wages are prescribed under the Act, whether as all-inclusive under Section 4(1)(iii) or by combining basic plus dearness allowance under Section 4(1)(i), are not amenable to split up. It is one pay package. Neither the scheme nor any provision of the Act provides that the rates of minimum wages are to be split up on the basis of the cost of each of the necessities taken into consideration for fixing the same."
In other words, if the remuneration paid to the employees is equal to or more than the minimum rates of wages, the employer has complied with the law in substance.
From India, Mumbai
Gaurav, the Supreme Court has already rules in 2019 that PF is to be paid on gross salary less hra, and certain allowances that are specific for reimbursement of specific expenses and not paid to all employees (concept of uno component of wages). Everything else is a part of basic wages in PF.
Therefore, the splitting of wage structure into various component is immaterial today. PF is to be paid on all allowances that are UNO (universal, normal and obligatory). Whether you can split minimum wages or not is a different argument, but it will no longer affect PF computation.
From India, Mumbai
Therefore, the splitting of wage structure into various component is immaterial today. PF is to be paid on all allowances that are UNO (universal, normal and obligatory). Whether you can split minimum wages or not is a different argument, but it will no longer affect PF computation.
From India, Mumbai
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Minimum Wage of UP & UK.pdf