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Dear Sonia, Since the notice pay does not fall within the meaning of wages as per PF Act, therefore, the PF is not deducted. I think it’s clear now. Rgds, Madan Singh Gurgaon
From India, Delhi
From India, Delhi
Dear Sonia,
PF deduction applicable only on workings period only, But Notice period is not a working days. Notice period is applicable as per the notice period clause according to appointment order.
Satya Reddi
From India
PF deduction applicable only on workings period only, But Notice period is not a working days. Notice period is applicable as per the notice period clause according to appointment order.
Satya Reddi
From India
Dear Sonia,
As per PF deduction rule, if any employee resign from the organization, his/her final settlement treated as Notice Pay or salary for the resigned month.
Hence, his/her PF will be deducted as earlier already deducted by the organization.
I hope it will clear ur doubts.
Rgds
Bhagwan Tolani
SR. HR
CM Group
New Delhi
9968737796
From India, Mumbai
As per PF deduction rule, if any employee resign from the organization, his/her final settlement treated as Notice Pay or salary for the resigned month.
Hence, his/her PF will be deducted as earlier already deducted by the organization.
I hope it will clear ur doubts.
Rgds
Bhagwan Tolani
SR. HR
CM Group
New Delhi
9968737796
From India, Mumbai
Dear All,
If we try and understand the concept behind Notice Pay; we'll get to know whether we have to contribute PF on the same or not.
In the Appointment letter we mention the clause of Notice pay to avoid employees to leave the company at his own wish; without assuming his accountability. To avoid the loss of loosing an employee out of the blue; company adds the clause of Notice pay. It means that if any employee wishes to resign he will serve a notice of 1 month(or whatever mentioned) such that in all such time the company shall find his replacement and train the new hire ,without any loss to the co.
If any employee disagrees to serve such period; then to penalise him or to force him to stay back for a month, such amount called 'Notice Pay' is claimed. On the other hand, if any company wishes to terminate an employee with immediate effect, in order to compensate to him the cost of him finding a new job, such an amount is paid called 'Notice Pay'.
In both the cases, we clearly observe that the employee was not the employee/or was not on the rolls of the co. Thus, in my view PF should not be deducted by way of wages. As 'Notice Pay' is not any wage being paid to any party rather a compensatory amount which us by default equal to one's salary.
I may not be 100% correct. But this was according to my knowledge. I hope that clears many doubts.
Thanks & Regards,
Parul Makkar
Manager - HR
From India, Delhi
If we try and understand the concept behind Notice Pay; we'll get to know whether we have to contribute PF on the same or not.
In the Appointment letter we mention the clause of Notice pay to avoid employees to leave the company at his own wish; without assuming his accountability. To avoid the loss of loosing an employee out of the blue; company adds the clause of Notice pay. It means that if any employee wishes to resign he will serve a notice of 1 month(or whatever mentioned) such that in all such time the company shall find his replacement and train the new hire ,without any loss to the co.
If any employee disagrees to serve such period; then to penalise him or to force him to stay back for a month, such amount called 'Notice Pay' is claimed. On the other hand, if any company wishes to terminate an employee with immediate effect, in order to compensate to him the cost of him finding a new job, such an amount is paid called 'Notice Pay'.
In both the cases, we clearly observe that the employee was not the employee/or was not on the rolls of the co. Thus, in my view PF should not be deducted by way of wages. As 'Notice Pay' is not any wage being paid to any party rather a compensatory amount which us by default equal to one's salary.
I may not be 100% correct. But this was according to my knowledge. I hope that clears many doubts.
Thanks & Regards,
Parul Makkar
Manager - HR
From India, Delhi
Dear Friend,
I have a question against yor question If A is working with a company with a basic salary of Rs. 5000/- pm and quits giving a notice of 1 month and quits on last day of the month what will be his basic salary in Full and Final settlement?
and If B is working with a company with a basic salary of Rs. 5000/- pm and quits without giving any notice what will be his basic salary in Full and Final settlement?
What ever you answer is you have to deduct pf on that amount.
Hope it is clear now.
With regards,
Nitin
From India, Pune
I have a question against yor question If A is working with a company with a basic salary of Rs. 5000/- pm and quits giving a notice of 1 month and quits on last day of the month what will be his basic salary in Full and Final settlement?
and If B is working with a company with a basic salary of Rs. 5000/- pm and quits without giving any notice what will be his basic salary in Full and Final settlement?
What ever you answer is you have to deduct pf on that amount.
Hope it is clear now.
With regards,
Nitin
From India, Pune
Hi sonia,
let me try to explain you, Mr. Harshad is right, any notice pay (either payable or recoverable) is not comes under the definition of PF wage as per PF act, so there is no deduction.
The Notice pay is a part of contract made between employee & employer for employment, and notice pay amount is not comes under the preview of any act for comliances.
I think it will help you in your thought.
Regards
Khushbu
From India, Delhi
let me try to explain you, Mr. Harshad is right, any notice pay (either payable or recoverable) is not comes under the definition of PF wage as per PF act, so there is no deduction.
The Notice pay is a part of contract made between employee & employer for employment, and notice pay amount is not comes under the preview of any act for comliances.
I think it will help you in your thought.
Regards
Khushbu
From India, Delhi
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PF notice to establishments 28082019.pdf
Pf notice.jpg
Notice pay recovery certificate.doc