It is not necessary that basic should be in certain percentage of gross CTC. Basic varies from city to city. As per the compliance for Mumbai, basic should be atleast Rs. 10,000. If it doesn't have Rs. 10,000/ as basic then company comes under bonus act.
From India, Mumbai
From India, Mumbai
Dear Ruchi, Is there any notification regarding fixing 10000 as basic by labour department or you talking of similar industry standards???
From India, Calcutta
6From India, Calcutta
No, I don't think that there is any legal requirement of fixing the basic wage at Rs 10000 if the establishment is in Bombay. Certainly, if the minimum wages notification calls for a basic wage of Rs 10000, that will be maintainable.
Coming to Abdul's apprehension of role of HR in cost reduction, I would appreciate that HR has to participate in such cost reduction programs of the company. I have seem even Unions dropping their demand for wage hike or bonus when they realise that the company's financial condition is in a bad shape. But that does not mean that you can fix the wage lower than minimum wages or with a very low basic wage so that you can reduce employer's contributions towards statutory funds or bonus. If you had earlier given PF on gross wages and now want to reduce it to basic wage, you can do that, but subject to one condition that that basic wages or PF qualifying wages (Contributing wages) should not be less than Rs 15000. Section 12 of the PF Act provides that in PF qualifying wages should not be reduced so as to reduce the employer's liability. But the same will not be applicable when it is reduced from a much higher amount to the PF ceiling wages. This was decided in Maratwada Gramin Banks case wherein the Supreme Court has ruled that employer can reduce the PF wages and the PF Organisation has no right to demand contribution on an amount over Rs 6500 (at the time the ruling came, the wage ceiling was Rs 6500, but now it has become Rs 15000)
Madhu.T.K
From India, Kannur
Coming to Abdul's apprehension of role of HR in cost reduction, I would appreciate that HR has to participate in such cost reduction programs of the company. I have seem even Unions dropping their demand for wage hike or bonus when they realise that the company's financial condition is in a bad shape. But that does not mean that you can fix the wage lower than minimum wages or with a very low basic wage so that you can reduce employer's contributions towards statutory funds or bonus. If you had earlier given PF on gross wages and now want to reduce it to basic wage, you can do that, but subject to one condition that that basic wages or PF qualifying wages (Contributing wages) should not be less than Rs 15000. Section 12 of the PF Act provides that in PF qualifying wages should not be reduced so as to reduce the employer's liability. But the same will not be applicable when it is reduced from a much higher amount to the PF ceiling wages. This was decided in Maratwada Gramin Banks case wherein the Supreme Court has ruled that employer can reduce the PF wages and the PF Organisation has no right to demand contribution on an amount over Rs 6500 (at the time the ruling came, the wage ceiling was Rs 6500, but now it has become Rs 15000)
Madhu.T.K
From India, Kannur
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