Hi
Everyone!
Both Minimum Wages (MW) and Provident Fund(PF) are governed by two different statutes independently and without reference to each other. MW is inclusive of various component incl HRA, but Basic Wages do not. In recent case P&H High court has decided in G4s case. There are many decisions by EPF App Tribunal where the dues determined on HRA component by GGN have been termed as improper. The definition of wages from any other law in contradiction of Basic Wages as per EPF Act are not relevant.
MW does not prohibit bifurcation of wages into various components including HRA and ensures that total should not be less. PF specifically excludes HRA besides other components where the contributions are not computed under the EPF Act. Hence the PF can not be a part for PF as per basic Law. PF can not ensure MW & vice a versa.
Bhargava S K RPFC Gr I (Retd.)
From India, Jaipur
10Everyone!
Both Minimum Wages (MW) and Provident Fund(PF) are governed by two different statutes independently and without reference to each other. MW is inclusive of various component incl HRA, but Basic Wages do not. In recent case P&H High court has decided in G4s case. There are many decisions by EPF App Tribunal where the dues determined on HRA component by GGN have been termed as improper. The definition of wages from any other law in contradiction of Basic Wages as per EPF Act are not relevant.
MW does not prohibit bifurcation of wages into various components including HRA and ensures that total should not be less. PF specifically excludes HRA besides other components where the contributions are not computed under the EPF Act. Hence the PF can not be a part for PF as per basic Law. PF can not ensure MW & vice a versa.
Bhargava S K RPFC Gr I (Retd.)
From India, Jaipur
Dear Bhargava sir, & others
It is nice to have the right officer Sri Bhargava on this platform. He has clarified the points clearly. I hope he would agree with the points indicated by me above.
Mr.Kishanu's reply is misleading - Please note, PF act is very clear that basic + DA and any food concession given are to be taken for PF contribution and not any allowance.
The questioners not to confuse with minimum wages and PF contributions - please take the above definition as per act.
Regards
K.Ramachandra
Bangalore
It is nice to have the right officer Sri Bhargava on this platform. He has clarified the points clearly. I hope he would agree with the points indicated by me above.
Mr.Kishanu's reply is misleading - Please note, PF act is very clear that basic + DA and any food concession given are to be taken for PF contribution and not any allowance.
The questioners not to confuse with minimum wages and PF contributions - please take the above definition as per act.
Regards
K.Ramachandra
Bangalore
Sir,
As per you EPF is no need for trainees, then, who is trainee? is there any definition? is there any terms & condition for trainees?
Employer may tell all the workmen as trainee to escape from EPF contribution.
So, Kindly explain, what are all the condition to follow to tell trainee.
Regards,
Viswanathan R
9444088607
From India, Madras
As per you EPF is no need for trainees, then, who is trainee? is there any definition? is there any terms & condition for trainees?
Employer may tell all the workmen as trainee to escape from EPF contribution.
So, Kindly explain, what are all the condition to follow to tell trainee.
Regards,
Viswanathan R
9444088607
From India, Madras
Sir,
Shall i calculate basic & da from gross salary on my won percentage?
I came to know that not necessary to maintain EPF to the employees whoever is getting more than 6500/month Basic & DA. If it is, employer can make all the employees Basic & DA more than 6500/- to escape from EPF eligibility.
kindly give your explanation please.
Regards,
Viswanathan R
9444088607
From India, Madras
Shall i calculate basic & da from gross salary on my won percentage?
I came to know that not necessary to maintain EPF to the employees whoever is getting more than 6500/month Basic & DA. If it is, employer can make all the employees Basic & DA more than 6500/- to escape from EPF eligibility.
kindly give your explanation please.
Regards,
Viswanathan R
9444088607
From India, Madras
In my blog i have explained PF calculation and HRA caclulation and how they are interlinked.
Search in google 'Indian Salary Simplified' to view my blog. You will definitely find all relevant answers to ur questions
From Germany, Mühlhausen
Search in google 'Indian Salary Simplified' to view my blog. You will definitely find all relevant answers to ur questions
From Germany, Mühlhausen
Dear Mr Vishwanathan
The employer may restrict payment of PF contribution upto Rs.6500/- only. This is allowed as per PF Act. However, most of the employers as a retention factor and to motivate the employees, pay contribution for their full basic, DA and any food concession given. Also we cannot have our own percentage of PF as PF Act very clearly specifies that 12% from employee, 12% from Employer (8.33% to pension fund and 3.67% to PF) + administrative charges and EDLI contribution by employer. Please note that the option of restricting payment of PF contribution is available when the employee joins the company. At that time, the company can decide whether to pay PF contribution for those who draw more than Rs.6500/- or not. But if company covers them once, they have to continue to cover them and it cannot be withdrawn after paying contribution for some months.
Based on this, you may take a suitable decision.
Regards
K.Ramachandra
Bangalore
The employer may restrict payment of PF contribution upto Rs.6500/- only. This is allowed as per PF Act. However, most of the employers as a retention factor and to motivate the employees, pay contribution for their full basic, DA and any food concession given. Also we cannot have our own percentage of PF as PF Act very clearly specifies that 12% from employee, 12% from Employer (8.33% to pension fund and 3.67% to PF) + administrative charges and EDLI contribution by employer. Please note that the option of restricting payment of PF contribution is available when the employee joins the company. At that time, the company can decide whether to pay PF contribution for those who draw more than Rs.6500/- or not. But if company covers them once, they have to continue to cover them and it cannot be withdrawn after paying contribution for some months.
Based on this, you may take a suitable decision.
Regards
K.Ramachandra
Bangalore
Mr.Vihwanathan
A trainee is one who is taken by the company to give on job training and later may be absorbed as a permanent employee. or to take care of the office/company's requirements, and to have minimum bindings, the companies engage trainees. All trainees, as long as the PF act is applicable to such organisations depending on the number of persons employed, PF contribution is payable. The companies cannot escape !! Only a trainee who is appointed under Apprenticeship Act is not covered for PF.
Regards
K.Ramachandra
Bangalore
A trainee is one who is taken by the company to give on job training and later may be absorbed as a permanent employee. or to take care of the office/company's requirements, and to have minimum bindings, the companies engage trainees. All trainees, as long as the PF act is applicable to such organisations depending on the number of persons employed, PF contribution is payable. The companies cannot escape !! Only a trainee who is appointed under Apprenticeship Act is not covered for PF.
Regards
K.Ramachandra
Bangalore
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PF Contribution on Leave Encashment - Clarification by EPFO.pdf