Hi If they are covered under Minimum wages no other option we have to follow Act else Management can take a call on it. Cheers Karthik Nayudu
From India, Vijayawada
80From India, Vijayawada
There are states which had fixed MW as basic + VDA + service weightage.If the employee is getting only the MW then basic cannot be reduced even if employee agree because it is contracting out.It is also not advisable where DA,HRA,etc are paid as a % of basic.If the reduction in basic results in reduction of benefits/contribution under EPF,ESI,Gratuty,ID ,Bonus Acts or subsistence allowance etc,then also it is not right.
Varghese Mathew
9961266966
From India, Thiruvananthapuram
Varghese Mathew
9961266966
From India, Thiruvananthapuram
Dear SaswataBanerjee
Restructuring the pay/wage scales is different from reducing the salary/wage. If the restructuring is through a valid and legal settlement(I am discussing only regarding workmen covered by the provisions of the Industrial Disputes Act) then there is no dispute between the employer and the workmen and therefore section 9A will not be attracted.
With regards
From India, Madras
Restructuring the pay/wage scales is different from reducing the salary/wage. If the restructuring is through a valid and legal settlement(I am discussing only regarding workmen covered by the provisions of the Industrial Disputes Act) then there is no dispute between the employer and the workmen and therefore section 9A will not be attracted.
With regards
From India, Madras
Dear Soma
IF i'm not wrong your company want's restructure the compensation part it is Mostly known as "Restructuring of Compensation". I want to clear you one thing that your company can reduce the Basic Salary without affecting the Gross by dividing it into various allowances but, keep it always in your mind that your basic salary should not be less than Minimum Wages and it should not violate the minimum wages act.
2. The PF officer will never see that why your are paying more allowances he will only check the PF that whether your paying PF or not and that is to not violating minimum wages(THIS IS THE REALITY).
3. You will get one another profit that your company will going to pay lesser amount of TAX because company only pay Income Tax on BASIC+DA so it's good for your company to reduce the basic.
Regards
Anjana
From India, Bhubaneswar
IF i'm not wrong your company want's restructure the compensation part it is Mostly known as "Restructuring of Compensation". I want to clear you one thing that your company can reduce the Basic Salary without affecting the Gross by dividing it into various allowances but, keep it always in your mind that your basic salary should not be less than Minimum Wages and it should not violate the minimum wages act.
2. The PF officer will never see that why your are paying more allowances he will only check the PF that whether your paying PF or not and that is to not violating minimum wages(THIS IS THE REALITY).
3. You will get one another profit that your company will going to pay lesser amount of TAX because company only pay Income Tax on BASIC+DA so it's good for your company to reduce the basic.
Regards
Anjana
From India, Bhubaneswar
Dear Soma,
I agree with the point of Anjana, also I have a court judgment, I am sharing, will support your position.
Also let the experts in the forum share their views, then you can decide whether to roll back to your old pay structure or let us face the PF inspectors..
Regards
From India, Coimbatore
I agree with the point of Anjana, also I have a court judgment, I am sharing, will support your position.
Also let the experts in the forum share their views, then you can decide whether to roll back to your old pay structure or let us face the PF inspectors..
Regards
From India, Coimbatore
Dear PT Ramesh ji, The question of querist is - Can basic be decresed ? Is it legal ? Your reply says that the PF contribution can be reduced. This is not the answer to the queriest question.
From India, Mumbai
From India, Mumbai
Mr Remesan
The case you mentioned is not on reducing the basic.It was on the question of whether management can reduce the PF contribution from the higher rate to the prescribed statutory limit of Rs 6500/-.The bank was contributing for the wages in excess of Rs6500/-.They decided to limit the contribution on 6500/only The SC upheld it.
VARGHESE MATHEW
9961266966
From India, Thiruvananthapuram
The case you mentioned is not on reducing the basic.It was on the question of whether management can reduce the PF contribution from the higher rate to the prescribed statutory limit of Rs 6500/-.The bank was contributing for the wages in excess of Rs6500/-.They decided to limit the contribution on 6500/only The SC upheld it.
VARGHESE MATHEW
9961266966
From India, Thiruvananthapuram
Dear all,
I feel that any component of the wages could be revised upwards or downwards based on the understanding between mgt. & workers/unions, but the same should not be less than the min. Wages under the Act. If we consider the quantum of min wages and the wages prescribed under various labour welfare legislations for contributions, it will be seen that the bare compliance will not be affected.
Secondly, going by the present trend of CTC, such adjustments are the order of the day. Ultimately, it is a question of whether the workers raise any dispute over it. If not, proceed without any worry.
Thirdly, as regards Fixed term or contractual employment is concerned, every term is independent of each other and the Mgt. is at liberty to fix compensation based on demand & supply without attracting prov. 9A of ID Act. There is no restrictions thereon.
Seniors may pls guide.
Rgds.
From India, Mumbai
I feel that any component of the wages could be revised upwards or downwards based on the understanding between mgt. & workers/unions, but the same should not be less than the min. Wages under the Act. If we consider the quantum of min wages and the wages prescribed under various labour welfare legislations for contributions, it will be seen that the bare compliance will not be affected.
Secondly, going by the present trend of CTC, such adjustments are the order of the day. Ultimately, it is a question of whether the workers raise any dispute over it. If not, proceed without any worry.
Thirdly, as regards Fixed term or contractual employment is concerned, every term is independent of each other and the Mgt. is at liberty to fix compensation based on demand & supply without attracting prov. 9A of ID Act. There is no restrictions thereon.
Seniors may pls guide.
Rgds.
From India, Mumbai
I agree.
Moreover, in the very document attached; it clearly says - "Section 12 prohibit the employer from reducing the wages of the employee for avoiding his liability to pay contributions to the E.P.F. Scheme. It says that the employer should not reduce whether directly or indirectly, the benefits of the old age pension, gratuity, provident fund, life insurance etc. to which the employee was entitled under the terms of his employment express or implied. The learned counsel for the petitioners submitted that there was a prohibition under Section 12 of the EPF Act that the employer should not reduce the benefits enjoyed by the employee either directly or indirectly and by reducing the employer''s share of contribution, the benefits which the employees were enjoying would be reduced. Section 12 imposes a prohibition from reducing the wages with an intent to, by reason only of his liability for the payment of contribution to the Scheme. It further says that the employer cannot reduce it directly or indirectly if by the terms of employment, the employee shall be entitled to such benefits......"
Warm regards.
From India, Delhi
Moreover, in the very document attached; it clearly says - "Section 12 prohibit the employer from reducing the wages of the employee for avoiding his liability to pay contributions to the E.P.F. Scheme. It says that the employer should not reduce whether directly or indirectly, the benefits of the old age pension, gratuity, provident fund, life insurance etc. to which the employee was entitled under the terms of his employment express or implied. The learned counsel for the petitioners submitted that there was a prohibition under Section 12 of the EPF Act that the employer should not reduce the benefits enjoyed by the employee either directly or indirectly and by reducing the employer''s share of contribution, the benefits which the employees were enjoying would be reduced. Section 12 imposes a prohibition from reducing the wages with an intent to, by reason only of his liability for the payment of contribution to the Scheme. It further says that the employer cannot reduce it directly or indirectly if by the terms of employment, the employee shall be entitled to such benefits......"
Warm regards.
From India, Delhi
Hi All,
One of my friend had a previous experience similar to this. They were paying Rs.200/- day to sewing operators and PF were contributing for Rs.200/-. Later they have restructured their wages and PF contribution started remitted excluding HRA. That is PF deducted and remitted on Rs.174/-instead of Rs.200/-. In this case they were able to convince PF officers.. Just I am sharing a practical case for information, and interested to know its legal validity further.
From India, Coimbatore
One of my friend had a previous experience similar to this. They were paying Rs.200/- day to sewing operators and PF were contributing for Rs.200/-. Later they have restructured their wages and PF contribution started remitted excluding HRA. That is PF deducted and remitted on Rs.174/-instead of Rs.200/-. In this case they were able to convince PF officers.. Just I am sharing a practical case for information, and interested to know its legal validity further.
From India, Coimbatore
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