PF Act doesn`t say about minimum wages. it only says about wages-ie., basic+DA to be considered for PF calculation, however it is implied that you are stipulated to the min wages act which is also equally applicable to your factory. in any case PF inspector cannot demand the min wages comply
regards
robert[/QUOTE]
From India, Madras
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2regards
robert[/QUOTE]
From India, Madras
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dear meenakshi,
mimimum wages means its a limit of wages for a person like unskilled , semiskilled and skilled. Means government is saying that if you are saying to any person helper then you have to pay the basic +vda which is decided by the government for helper. Means you have to deduct the p.f on government decided basic+v.da ( for example if minimum wages of helper is 4000/- and you are paying him 5000 then you can spilt but remember basic + vda will be 4000/- and 1000 extra will go in other parts. Ok?
From India, Rudarpur
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mimimum wages means its a limit of wages for a person like unskilled , semiskilled and skilled. Means government is saying that if you are saying to any person helper then you have to pay the basic +vda which is decided by the government for helper. Means you have to deduct the p.f on government decided basic+v.da ( for example if minimum wages of helper is 4000/- and you are paying him 5000 then you can spilt but remember basic + vda will be 4000/- and 1000 extra will go in other parts. Ok?
From India, Rudarpur
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(Fact Check Failed/Partial)-The user's reply contains inaccuracies. Minimum wage components should not be split arbitrarily. The Basic + VDA should meet or exceed the minimum wage set by the government.
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hi
what the employee is entitiled to get is the wages, the totality thereof, at the rate not less than the minimum wages rate prescribed and therefore , if the employee is paid more than the minimum wages, it cannot be said that there was breach of the employer's duty as defined by the section 12(1) of the act .
even as per the judgement of apex count no need of paying VDA separately.
thanks
From India, Pune
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what the employee is entitiled to get is the wages, the totality thereof, at the rate not less than the minimum wages rate prescribed and therefore , if the employee is paid more than the minimum wages, it cannot be said that there was breach of the employer's duty as defined by the section 12(1) of the act .
even as per the judgement of apex count no need of paying VDA separately.
thanks
From India, Pune
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(Fact Check Failed/Partial)-The user's reply is incorrect. As per labor laws, if an employee is paid more than the minimum wage, it doesn't absolve the employer from meeting the minimum wage requirement. Also, the reference to the judgment of the apex court regarding VDA is not accurate.
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Hai
Much was discussed on this subject. The actual point for discussion is whether the minimum wages paid to an employee can be bifurcated into various components like Basic, DA, HRA, Conveyance Allowance, Washing Allowance, Special Allowance etc and by including all these allowance it should not be less than the minimum wages prescribed by the Government to a particular class of establishments/category of employees.
As per Section 2 sub-section (h) Payment of Minimum Wages Act, 1948, the wages is defined as "all remuneration, capable of being expressed in terms of money, which would, if the terms of the contract of employment, express or implied, were fulfilled be payable to a person in respect of his employment or of work done in such establishment and includes house rent allowance but does not exclude certain type of allowances as mentioned in clauses (i) to (v) under the afore said section.
By persuing the language used in the above definition the minimum wage constitutes all the allowances which are capable of being expressed in terms of money. Hence there is no harm in bifurcating the minimum wage component in to various nomenclature of allowances but it should be keep in mind that all these allowances put to gether should not be less than the minimum wages prescribed by the Government to the particular class of establishment/factory.
However, as per Section 6 of the P F Act says the contributions as per the rates fixed by the Government shall be payable on "basic wages, dearness Allowance and retaining allowance if any and Sec 2(b) defines what is basic wage. According to which basic wage means all emoluments which are earned by an employee while on duty in accordance with its terms of employment but does not include HRA/Commission/any other similar wages. For example in out pay structure if HRa/Special Allowance /Commission is included it will satisfy the requirement of Minimum Wages Act and also not liable to pay contributions on those allowance under the PF Act. From the above it is clear we can bifurcate the minimum wages as per the standing orders of the Company and pay the PF contributions only on those allowances as defined under the PF Act.
Thanks
With regards
From India, Hyderabad
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Much was discussed on this subject. The actual point for discussion is whether the minimum wages paid to an employee can be bifurcated into various components like Basic, DA, HRA, Conveyance Allowance, Washing Allowance, Special Allowance etc and by including all these allowance it should not be less than the minimum wages prescribed by the Government to a particular class of establishments/category of employees.
As per Section 2 sub-section (h) Payment of Minimum Wages Act, 1948, the wages is defined as "all remuneration, capable of being expressed in terms of money, which would, if the terms of the contract of employment, express or implied, were fulfilled be payable to a person in respect of his employment or of work done in such establishment and includes house rent allowance but does not exclude certain type of allowances as mentioned in clauses (i) to (v) under the afore said section.
By persuing the language used in the above definition the minimum wage constitutes all the allowances which are capable of being expressed in terms of money. Hence there is no harm in bifurcating the minimum wage component in to various nomenclature of allowances but it should be keep in mind that all these allowances put to gether should not be less than the minimum wages prescribed by the Government to the particular class of establishment/factory.
However, as per Section 6 of the P F Act says the contributions as per the rates fixed by the Government shall be payable on "basic wages, dearness Allowance and retaining allowance if any and Sec 2(b) defines what is basic wage. According to which basic wage means all emoluments which are earned by an employee while on duty in accordance with its terms of employment but does not include HRA/Commission/any other similar wages. For example in out pay structure if HRa/Special Allowance /Commission is included it will satisfy the requirement of Minimum Wages Act and also not liable to pay contributions on those allowance under the PF Act. From the above it is clear we can bifurcate the minimum wages as per the standing orders of the Company and pay the PF contributions only on those allowances as defined under the PF Act.
Thanks
With regards
From India, Hyderabad
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(Fact Check Failed/Partial)-The user's reply is incorrect. The Payment of Wages Act, 1936, specifically prohibits the segregation of minimum wages into various components like Basic, DA, HRA, etc. All components must be considered together to ensure compliance with minimum wage laws.
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Dear ACCHR,
1. You can't split minimum wages into various components other then Basic & DA, if your providing more than the minimum wages notified for your specif trade then you can split excess amount into various components according to your wish to evade PF & ESI.
Example /- Minimum Wages is Rs.165/- specified by the Govt. if you're providing Rs.190/- then by keeping Rs.165/- as Basic & DA you can split the remaining amount into various components as per your wish.
Yes, wt ever PF Authorities says is correct in this particular regard. Better refer recent Karnataka High Court Judgement on the same (Group 4 Security Vs RPFO)
Regards / Pavan, 9629488214
From Australia
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1. You can't split minimum wages into various components other then Basic & DA, if your providing more than the minimum wages notified for your specif trade then you can split excess amount into various components according to your wish to evade PF & ESI.
Example /- Minimum Wages is Rs.165/- specified by the Govt. if you're providing Rs.190/- then by keeping Rs.165/- as Basic & DA you can split the remaining amount into various components as per your wish.
Yes, wt ever PF Authorities says is correct in this particular regard. Better refer recent Karnataka High Court Judgement on the same (Group 4 Security Vs RPFO)
Regards / Pavan, 9629488214
From Australia
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(Fact Check Failed/Partial)-The user's reply contains inaccuracies: 1. Minimum wages can be split into various components, not limited to Basic & DA, but must meet legal requirements. 2. Exceeding minimum wage does not allow arbitrary splitting. 3. Referring to the Karnataka High Court ruling is not relevant to this query. Please review the Minimum Wages Act and relevant notifications for accurate information.
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Dear All,
I had argument with many HR professionals about spliting of Miinimum Wages. Those who are truly HR profession will never allow to split the minimum wages. Even those who are good employer will never allow to split. There are high court judgement which is saying you can split the MW if you are paying more than MW but PF authorities will allow it or not I am not aware of it.
I also need a notification copy by PF authorities which says that PF do not have any concern with Minimum Wages (Basic+DA).
Regards,
Omprakash
From India, Pune
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I had argument with many HR professionals about spliting of Miinimum Wages. Those who are truly HR profession will never allow to split the minimum wages. Even those who are good employer will never allow to split. There are high court judgement which is saying you can split the MW if you are paying more than MW but PF authorities will allow it or not I am not aware of it.
I also need a notification copy by PF authorities which says that PF do not have any concern with Minimum Wages (Basic+DA).
Regards,
Omprakash
From India, Pune
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(Fact Check Failed/Partial)-The user's reply contains inaccuracies. According to labor laws, minimum wages should not be split into components like HRA or Special Allowance. PF authorities do consider minimum wages (Basic+DA). No specific notification exempts PF based on the wage structure.
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Dear All,
It was a useful discussion so far. No doubt that an employer has to pay minimum wages as per Minimum Wages applicable in that state. The question is whether this minimum wages payable can be split into different components and PF can be administered accordingly.
Assume Minimum Wages applicable to a particular state is Rs.182/- per day. This means we need to pay around Rs.4750/- p.m. Now, the question is whether this can be split into various components? Answer is “Yes”. For example, we can split like this
Basic HRA CCA Conv Other allowance Gross salary
1250 1750 500 800 450 4750
Hence, we need to pay 12% PF contribution only on the basic. I had attended a seminar convened by Employers' Federaration of Southern India (EFSI) recently in Chennai, wherein Commissioner of PF was one of the speakers. One of the participants raised a question that "was there any rule that certain percetage of Gross must be maintained as Basic (+DA)". He answered there is/was no such rule like that. It is employer's wish to have basic as 3500 or 1000. Only difference that will make is at the time of retirement, the superannuated employee will be left with little pension to be paid to him. It is employer's wish to give him more benefit or not - he asserted.
Hence there is
1. Nothing wrong in spliting the Minimum Wages in different components as long as you pay the min wages i.e. Rs.4750/- (in our example)
2. No specific set of rules w.r.t. fixing Basic wage for an employee/labour
Thanks,
V. Balaji
From India, Madras
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It was a useful discussion so far. No doubt that an employer has to pay minimum wages as per Minimum Wages applicable in that state. The question is whether this minimum wages payable can be split into different components and PF can be administered accordingly.
Assume Minimum Wages applicable to a particular state is Rs.182/- per day. This means we need to pay around Rs.4750/- p.m. Now, the question is whether this can be split into various components? Answer is “Yes”. For example, we can split like this
Basic HRA CCA Conv Other allowance Gross salary
1250 1750 500 800 450 4750
Hence, we need to pay 12% PF contribution only on the basic. I had attended a seminar convened by Employers' Federaration of Southern India (EFSI) recently in Chennai, wherein Commissioner of PF was one of the speakers. One of the participants raised a question that "was there any rule that certain percetage of Gross must be maintained as Basic (+DA)". He answered there is/was no such rule like that. It is employer's wish to have basic as 3500 or 1000. Only difference that will make is at the time of retirement, the superannuated employee will be left with little pension to be paid to him. It is employer's wish to give him more benefit or not - he asserted.
Hence there is
1. Nothing wrong in spliting the Minimum Wages in different components as long as you pay the min wages i.e. Rs.4750/- (in our example)
2. No specific set of rules w.r.t. fixing Basic wage for an employee/labour
Thanks,
V. Balaji
From India, Madras
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(Fact Check Failed/Partial)-The user's reply is incorrect. The Minimum Wages Act mandates that the entire minimum wage should be paid as a single component comprising Basic + DA. PF is calculated on this total amount, not just the Basic. Splitting minimum wage components is not permissible under the law.
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Not at all. If you are not paying as per labor rules and bifurcation given by labor ministry than you are defaulting. Rgds, OPK
From India, Pune
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From India, Pune
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(Fact Check Failed/Partial)-The user reply is incorrect. According to labor laws, minimum wage components can be split into Basic + DA, HRA, and Special Allowance, as long as the total equals or exceeds the minimum wage. Companies can structure salaries accordingly.
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Dear All, Let us know the current case status on MW stay. Regards, Gopal Nath
From India, New Delhi
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From India, New Delhi
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(Fact Check Failed/Partial)-The user reply does not address the original post about splitting minimum wage components or providing necessary notifications. No relevant information is provided regarding the case status on MW stay.
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Dear Manishi,
You cannot split the minimum wages for the purpose of PF. You should go through the minimum wages, which are clearly defined into Basic and DA. Splitting the minimum wages itself is non-compliance.
As per the Minimum Wages Act, you have to pay the defined basic wages, DA, and a minimum of 5% HRA (it may vary from state to state). You can pay more, but not less than the defined amounts.
Thanks,
Om
From India, Pune
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You cannot split the minimum wages for the purpose of PF. You should go through the minimum wages, which are clearly defined into Basic and DA. Splitting the minimum wages itself is non-compliance.
As per the Minimum Wages Act, you have to pay the defined basic wages, DA, and a minimum of 5% HRA (it may vary from state to state). You can pay more, but not less than the defined amounts.
Thanks,
Om
From India, Pune
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(Fact Check Failed/Partial)-The user's reply is partially correct. The Minimum Wages Act mandates a specific structure for minimum wages that includes Basic, DA, and some states allow for a percentage of HRA. However, the Act does not permit the splitting of minimum wages into different components like HRA or Special Allowance. It should be paid as per the defined structure. The user is correct in mentioning that paying below the defined amount is non-compliance.
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Splitting of minimum wages for PF in abeyance (1).pdf
Minimum Wages, ESI & PF.pps
CiteHR.AI
(Fact Check Failed/Partial)-The user's reply contains some inaccuracies. The PF Act does not specifically mention minimum wages, but compliance with the Minimum Wages Act is essential. PF calculation is based on basic+DA. PF inspectors can enforce compliance with minimum wage laws.