Recently, our consultant sent the minimum wages payable in a state and opined that the PF deduction should happen at the minimum wages priscribed for that State.
Clarification sought is :
currently the basic salary of employees on this particular state is much less than the minimum wages, however, the monthly salary paid out is atleast 25% higher than the minimum wages ( break up is Basic, HRA (40% of Basic), conveyance, special allowance, Personal pay, Medical allowance (1250 per month)
Is it necessary to raise the basic salary of all such employees to the min wages now, which is around 5900 per month
Is there any mention in PF act or any amendment to suggest so
an early reply is highly appreciated
regards
sreedharan
From India, Mumbai
Clarification sought is :
currently the basic salary of employees on this particular state is much less than the minimum wages, however, the monthly salary paid out is atleast 25% higher than the minimum wages ( break up is Basic, HRA (40% of Basic), conveyance, special allowance, Personal pay, Medical allowance (1250 per month)
Is it necessary to raise the basic salary of all such employees to the min wages now, which is around 5900 per month
Is there any mention in PF act or any amendment to suggest so
an early reply is highly appreciated
regards
sreedharan
From India, Mumbai
yes, you need to make basic salary at minimum wages i.e 5900/- as per your location & PF needs to deducted on 5900/- salary
From India, New Delhi
1From India, New Delhi
Sreedharan
As per P.F Act, the contribution is to be deducted on basic +DA +retaining allowance + cash value of food concesion subject to the maximum of Rs.6500/-p.m. In your case, the retaining allowance and cash value of food concession is not paid and therefore what counts for contribution is basic + DA . However some High courts held that all allowances other than HRA will also count for P.F contribution.But the decision, I understand has been appealed before Supreme Court.
B.Saikumar
HR & Labour Law advsior
Mumbai
From India, Mumbai
As per P.F Act, the contribution is to be deducted on basic +DA +retaining allowance + cash value of food concesion subject to the maximum of Rs.6500/-p.m. In your case, the retaining allowance and cash value of food concession is not paid and therefore what counts for contribution is basic + DA . However some High courts held that all allowances other than HRA will also count for P.F contribution.But the decision, I understand has been appealed before Supreme Court.
B.Saikumar
HR & Labour Law advsior
Mumbai
From India, Mumbai
should the CTC reflect both employer contribution and employee contribution of the PF. is it acceptable by law . Please advise.
From India, Hyderabad
From India, Hyderabad
Dear Fellow members
Most of us are fighting with conceptual conflict please try to understand that EPF Act did not spell about amount or percentage of basic + D A / Sp Allowance + etc or in short pf wages. Hence no question of increasing amount of pf wages according to amendment of minimum wages.
when you are paying exactly as per minimum wages of various schedule employments declared by state govt of Maharashtra or any other state - you have to strictly follow the amount of Basic + D A as pf wages.
If you are paying above minimum wages or so called FAIR WAGES then simply follow the directives of court that employer may decide the amount of pf wages (BASIC + DA) for more details kindly refer the thread of Minimum Wages at our cite HR.
God will bless all of us.
From India, Mumbai
Most of us are fighting with conceptual conflict please try to understand that EPF Act did not spell about amount or percentage of basic + D A / Sp Allowance + etc or in short pf wages. Hence no question of increasing amount of pf wages according to amendment of minimum wages.
when you are paying exactly as per minimum wages of various schedule employments declared by state govt of Maharashtra or any other state - you have to strictly follow the amount of Basic + D A as pf wages.
If you are paying above minimum wages or so called FAIR WAGES then simply follow the directives of court that employer may decide the amount of pf wages (BASIC + DA) for more details kindly refer the thread of Minimum Wages at our cite HR.
God will bless all of us.
From India, Mumbai
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PF applicability.p df