Dear Dev ji,
Firstly, in your question, you have not given full details i.e. under what circumstances your company has to reduce the basics. Second, while changing the timings and weekly offs of the employee, have you obtained permission from the competent person as per the Shops & Estb Act or Factories Act? Thirdly, is there any understanding between the employee and employer on under what conditions the basic wages reduce?
Furthermore, according to the PF/ESI Act, you should not reduce the Basic/DA, etc. (PF/ESI ceiling limits should be kept in mind).
Regards,
PBS KUMAR
From India, Kakinada
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592Firstly, in your question, you have not given full details i.e. under what circumstances your company has to reduce the basics. Second, while changing the timings and weekly offs of the employee, have you obtained permission from the competent person as per the Shops & Estb Act or Factories Act? Thirdly, is there any understanding between the employee and employer on under what conditions the basic wages reduce?
Furthermore, according to the PF/ESI Act, you should not reduce the Basic/DA, etc. (PF/ESI ceiling limits should be kept in mind).
Regards,
PBS KUMAR
From India, Kakinada
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Reduction in Basic will mean a reduction in PF contribution, which is not acceptable. In one of my earlier companies, some employees' basic pay was reduced due to restructuring of salary components. We received a notice from the PF department regarding the reduced contribution. Whatever changes you make, reduce the other components and avoid reducing basic pay.
From India, Bangalore
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From India, Bangalore
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Hi friend,
Once you have fixed the salary, you cannot reduce the basic salary as you have to carry out the statutory compliance on the same. If you want to reduce the working days from 6 to 5, that is up to your Management's decision, but you cannot reduce the basic salary. As per any act, the working hours in the week are 48 hours. So depending on your industry, you can adjust those working hours in 5 days if required.
ThanQ K. Srinivasa Rao
From India, Hyderabad
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Once you have fixed the salary, you cannot reduce the basic salary as you have to carry out the statutory compliance on the same. If you want to reduce the working days from 6 to 5, that is up to your Management's decision, but you cannot reduce the basic salary. As per any act, the working hours in the week are 48 hours. So depending on your industry, you can adjust those working hours in 5 days if required.
ThanQ K. Srinivasa Rao
From India, Hyderabad
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You don't think that by reducing manpower, you are increasing recession in today's market. As far as my study goes, there are very few job opportunities. Instead, if you provide job security by reducing some amount of salary, you are just cutting costs and potentially reducing the impact of the recession. I have observed that people who have been laid off are willing to return today at 50% of their previous salary. If we consider this perspective and reduce salaries by 10-20%, it would be a better approach. However, it is also important to discuss this issue and the market conditions with your employees.
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Dear Neeraj,
It's not possible to reduce one's basic salary once it has been increased. There is only one way to reduce it, though it is not practical: we would have to have the individual resign, and after that, it could be possible. Alternatively, we could create an agenda to restructure all of the employees, and in that scenario, it could be achieved.
Best regards,
[Your Name]
From India, New Delhi
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It's not possible to reduce one's basic salary once it has been increased. There is only one way to reduce it, though it is not practical: we would have to have the individual resign, and after that, it could be possible. Alternatively, we could create an agenda to restructure all of the employees, and in that scenario, it could be achieved.
Best regards,
[Your Name]
From India, New Delhi
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The basic salary can be reduced if there is a change in the terms of employment, e.g., a full-time employee has changed to a part-time worker. In other circumstances, the basic salary cannot be changed as it impacts social security contributions like PF, etc.
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Related Info:
http://epfindia.nic.in <link updated to site home> (Search On Cite | Search On Google)
THE EMPLOYEES' PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952
(Act No. 19 of 1952)
Dated 4th March, 1952
12. Employer not to reduce wages, etc.
No employer in relation to an establishment to which any Scheme or the Insurance Scheme applies shall, by reason only of his liability for the payment of any contribution to the Fund or the Insurance Fund or any charges under this Act or the Scheme or the Insurance Scheme reduce whether directly or indirectly, the wages of any employee to whom the Scheme or the Insurance Scheme applies or the total quantum of benefits in the nature of old age pension, gratuity, provident fund or life insurance to which the employee is entitled under the terms of his employment, express or implied.
Employer is not supposed to reduce wages (which refers to Basic Pay) to minimize any benefit.
Regards,
Mridula Venugopal
From India, Bangalore
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http://epfindia.nic.in <link updated to site home> (Search On Cite | Search On Google)
THE EMPLOYEES' PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952
(Act No. 19 of 1952)
Dated 4th March, 1952
12. Employer not to reduce wages, etc.
No employer in relation to an establishment to which any Scheme or the Insurance Scheme applies shall, by reason only of his liability for the payment of any contribution to the Fund or the Insurance Fund or any charges under this Act or the Scheme or the Insurance Scheme reduce whether directly or indirectly, the wages of any employee to whom the Scheme or the Insurance Scheme applies or the total quantum of benefits in the nature of old age pension, gratuity, provident fund or life insurance to which the employee is entitled under the terms of his employment, express or implied.
Employer is not supposed to reduce wages (which refers to Basic Pay) to minimize any benefit.
Regards,
Mridula Venugopal
From India, Bangalore
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U can reduce leaves from ur leave structure. Go through Factory Act and Standing Order Act as well and further, if posible, go through " Practical journal of HRM & Labour Laws"
From India, Ahmadabad
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From India, Ahmadabad
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i feel basic salary can not reduce. by giving extra leaves if we deduct more pay than usaul will not acceptable. its not good strategy.
From India, Hyderabad
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From India, Hyderabad
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Hi,
First of all, your question is incomplete. Do you want to reduce expenses or bring down expenses by reducing employee wages? Implementing a five-day workweek can help control both direct and indirect costs.
Reducing employee wages is not a wise decision. It is important to focus on controlling wasteful expenses.
Thanks,
Sunil
From India, Pune
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First of all, your question is incomplete. Do you want to reduce expenses or bring down expenses by reducing employee wages? Implementing a five-day workweek can help control both direct and indirect costs.
Reducing employee wages is not a wise decision. It is important to focus on controlling wasteful expenses.
Thanks,
Sunil
From India, Pune
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Statutory Compliance of a Industrial or Commercial Unit.xls
Statutory-compl iance.pdf
Statutory Compliance.zip