Dear Dev,
I believe your company is considering reducing employees' salaries to address the challenges posed by the recession. In addition to cutting costs on administrative and other overheads, you are also planning to reduce the number of working days. It may be possible to decrease employees' salaries by 10% or any other percentage if your employees are informed about the company's difficulties and are willing to cooperate. I suggest engaging in discussions with the employees to communicate this decision and implementing the changes accordingly.
Regards,
Reebi
From India, Pune
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1I believe your company is considering reducing employees' salaries to address the challenges posed by the recession. In addition to cutting costs on administrative and other overheads, you are also planning to reduce the number of working days. It may be possible to decrease employees' salaries by 10% or any other percentage if your employees are informed about the company's difficulties and are willing to cooperate. I suggest engaging in discussions with the employees to communicate this decision and implementing the changes accordingly.
Regards,
Reebi
From India, Pune
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Hi Reebi Most of the members suggested that it is not possible. Nonetheless, you say that it can be done. May I know the basics of your answer please? Thanks with regards, Dev
From India, Delhi
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From India, Delhi
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Dear Dev,
You cannot reduce the basic salary resulting in a reduction in PF contribution. This would be a contradiction and non-compliance with Section 12 (not to reduce wages) of the EPF & MP Act - 1952, wherein an employer shall not reduce the wages that would result in a reduction in EPF contribution. Furthermore, reducing the basic salary will also impact leave encashment, gratuity, and the notice period.
Thanks,
Mohd. Arif Khan
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You cannot reduce the basic salary resulting in a reduction in PF contribution. This would be a contradiction and non-compliance with Section 12 (not to reduce wages) of the EPF & MP Act - 1952, wherein an employer shall not reduce the wages that would result in a reduction in EPF contribution. Furthermore, reducing the basic salary will also impact leave encashment, gratuity, and the notice period.
Thanks,
Mohd. Arif Khan
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Dear Dev,
Reebi is correct; you can reduce allowances with the mutual consent of the majority of employees affected by this decision. However, you cannot reduce the Basic, which is the basis for PF, Gratuity, Leave Encashment, Notice period, etc.
Most of the members suggested that it is not possible. Nonetheless, you say that it can be done. May I know the basics of your answer please?
Thanks with regards,
Dev
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Reebi is correct; you can reduce allowances with the mutual consent of the majority of employees affected by this decision. However, you cannot reduce the Basic, which is the basis for PF, Gratuity, Leave Encashment, Notice period, etc.
Most of the members suggested that it is not possible. Nonetheless, you say that it can be done. May I know the basics of your answer please?
Thanks with regards,
Dev
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I think before making any deduction in the basic salary, employees should be taken into confidence. Discuss with them. I think you can make a deduction if they agree to this formula. Make an agreement and get their signature on that.
From India, Kozhikode
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From India, Kozhikode
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Dear Ning Khan,
I don't think it is a good idea to reduce the workload and decrease the package of the employees. Instead, consider reducing the manpower and explore other strategies to generate revenues for the company.
Reducing manpower can lead to increased recession in today's market, where job opportunities are scarce. Providing job security by implementing slight salary reductions can help in cutting costs without contributing to the recession. I have observed that individuals who have been laid off are willing to return at reduced salaries, sometimes as low as 50% of their previous earnings.
Viewing the situation from this perspective and contemplating a salary reduction of 10-20% may be a more viable option. It is important to have open discussions with your employees regarding this matter and take into account the current market conditions.
Khan/KCS Recruitments
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I don't think it is a good idea to reduce the workload and decrease the package of the employees. Instead, consider reducing the manpower and explore other strategies to generate revenues for the company.
Reducing manpower can lead to increased recession in today's market, where job opportunities are scarce. Providing job security by implementing slight salary reductions can help in cutting costs without contributing to the recession. I have observed that individuals who have been laid off are willing to return at reduced salaries, sometimes as low as 50% of their previous earnings.
Viewing the situation from this perspective and contemplating a salary reduction of 10-20% may be a more viable option. It is important to have open discussions with your employees regarding this matter and take into account the current market conditions.
Khan/KCS Recruitments
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Dear HR Friend, You can increase working hrs. from Monday to Friday & keep min. Lunch break & dont take tea/coffee break to compen. the saturday holiday. Regards Sudhir
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Reducing salaries would mean digging our own (I mean the company's) grave. It entails cultivating discomfort and a sense of insecurity in employees, posing a potential risk to the company's reputation. Instead, the focus should be on cost-cutting measures such as halting or reducing travel expenses, streamlining operations, and addressing other overhead costs that are often overlooked.
From India, Pune
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From India, Pune
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dear concerned, You can not reduce the basic salary of the employees. but you can increase the working hours of weekdays to adjust the loss of one extra holiday (saturday)
From India, New Delhi
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From India, New Delhi
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Statutory Compliance of a Industrial or Commercial Unit.xls
Statutory-compl iance.pdf
Statutory Compliance.zip