Can someone tell me whether Food Allowance as part of monthly wages to workers will definitely attract PF contribution? Is there any case law in this regard?
Would appreciate your answer and request it at the earliest.
Govardhan
From India, Madras
18Would appreciate your answer and request it at the earliest.
Govardhan
From India, Madras
Dear Swastik,
Thank you for your quick response.
But, do you think Food allowance can be defined as 'cash value of any food concession' coming under the definition of basic wages in PF Act?
Recently, an Inspector from PF defines so.
Your opinion, please.
Regards,
Govardhan
From India, Madras
Thank you for your quick response.
But, do you think Food allowance can be defined as 'cash value of any food concession' coming under the definition of basic wages in PF Act?
Recently, an Inspector from PF defines so.
Your opinion, please.
Regards,
Govardhan
From India, Madras
Sir please kindly help me on where I can get all this infomation regarding the laws that a HR should know, Also, just let me know what ESI is? Regards, VINAY
From India
From India
Dear Govardhan,
As per the definition of basic wages under PF ACt, food value of concession is excluded. The extract of Section 2 (b) is given below.
" (b) "basic wages" means all emoluments which are earned by an employee while on duty or on leave or on holidays with wages in either case in accordance with the terms of the contract of employment and which are paid or payable in cash to him but does not include :
(i) the cash value of any food concession;
(ii) any dearness allowance (that is to say all cash payments by whatever name called paid to an employee on account of a rise in the cost of living) house-rent allowance overtime allowance bonus commission or any other similar allowance payable to the employee in respect of his employment or of work done in such employment;
(iii) any presents made by the employer; "
So, how it is attracting PF kindly ask the PF Inspector.
Regards,
SC
From India, Thane
As per the definition of basic wages under PF ACt, food value of concession is excluded. The extract of Section 2 (b) is given below.
" (b) "basic wages" means all emoluments which are earned by an employee while on duty or on leave or on holidays with wages in either case in accordance with the terms of the contract of employment and which are paid or payable in cash to him but does not include :
(i) the cash value of any food concession;
(ii) any dearness allowance (that is to say all cash payments by whatever name called paid to an employee on account of a rise in the cost of living) house-rent allowance overtime allowance bonus commission or any other similar allowance payable to the employee in respect of his employment or of work done in such employment;
(iii) any presents made by the employer; "
So, how it is attracting PF kindly ask the PF Inspector.
Regards,
SC
From India, Thane
Dear Vinay, ESI = Employees' State Insurance Act, 1948 which is a social security legislation. Kindly tell me what industry you work for then I can help you. Regards, SC
From India, Thane
From India, Thane
Dear Swastik,
Thanks again for your prompt response.
The Inspector says the food allowance is NOT cash value of food concession and therefore would form part of basic wages defined by the Act.
Is it a good arguement?
Regards,
Govardhan
From India, Madras
Thanks again for your prompt response.
The Inspector says the food allowance is NOT cash value of food concession and therefore would form part of basic wages defined by the Act.
Is it a good arguement?
Regards,
Govardhan
From India, Madras
Dear Govardhan,
Actually food value of concession is included under DA as per Section 6 of PF Act. Extract given below:
"6. *Contributions and matters which may be provided for in the Scheme
The contribution which shall be paid by the employer to the Fund shall eight and one-third per cent of the basic wages dearness allowances and retaining allowance (if any) for the time being payable to each of the employees (whether employed by him directly or by or through a contractor) and the employees' contribution shall be equal to the contribution payable by the employer in respect of him and may if any employee so desires and if the Scheme makes provision therefore be an amount not exceeding eight and one-third per cent of his basic wages dearness allowances and retaining allowance (if any) subject to the condition that the employer shall not be under an obligation to pay any contribution over and above his contribution payable under this section;
Provided that in its application to any establishment or class of establishments which the Central Government after making such inquiry as it deems fit may by notification in the Official Gazette specify this section shall be subject to the modification that for the words "eight and one-third per cent" at both the places where they occur the words "ten per cent" shall be substituted :
Provided further that where the amount of any contribution payable under this Act involves a fraction of a rupee the Scheme may provide for the rounding off of such fraction to the nearest rupee half of a rupee or quarter to a rupee.
Explanation 1 : For the purposes of this section dearness allowance shall be deemed to include also the cash value of any food concession allowed to the employee.
Explanation 2 : For the purposes of this section retaining allowance means an allowance payable for the time being to an employee of any factory or other establishment during any period in which the establishment is not working for retaining his services. "
So, Food Allowance if paid as a prt of salary irrespective of whether you consume food or not cannot be a part of either basic wages, DA or retention allowance as per the Act.
Regards,
SC
From India, Thane
Actually food value of concession is included under DA as per Section 6 of PF Act. Extract given below:
"6. *Contributions and matters which may be provided for in the Scheme
The contribution which shall be paid by the employer to the Fund shall eight and one-third per cent of the basic wages dearness allowances and retaining allowance (if any) for the time being payable to each of the employees (whether employed by him directly or by or through a contractor) and the employees' contribution shall be equal to the contribution payable by the employer in respect of him and may if any employee so desires and if the Scheme makes provision therefore be an amount not exceeding eight and one-third per cent of his basic wages dearness allowances and retaining allowance (if any) subject to the condition that the employer shall not be under an obligation to pay any contribution over and above his contribution payable under this section;
Provided that in its application to any establishment or class of establishments which the Central Government after making such inquiry as it deems fit may by notification in the Official Gazette specify this section shall be subject to the modification that for the words "eight and one-third per cent" at both the places where they occur the words "ten per cent" shall be substituted :
Provided further that where the amount of any contribution payable under this Act involves a fraction of a rupee the Scheme may provide for the rounding off of such fraction to the nearest rupee half of a rupee or quarter to a rupee.
Explanation 1 : For the purposes of this section dearness allowance shall be deemed to include also the cash value of any food concession allowed to the employee.
Explanation 2 : For the purposes of this section retaining allowance means an allowance payable for the time being to an employee of any factory or other establishment during any period in which the establishment is not working for retaining his services. "
So, Food Allowance if paid as a prt of salary irrespective of whether you consume food or not cannot be a part of either basic wages, DA or retention allowance as per the Act.
Regards,
SC
From India, Thane
Dear Swastik,
In Chapter V of the PF Scheme 1952 on the contributions, it is mentioned that 'the contributions payable by the employer under the Scheme shall be at the rate of (ten percent) of the [basic wages, dearness allowance (including the cash value of any food concession) and retaining allowance payable to each employee to whom the scheme applies:'
What would be the implication of this definition of contribution found in the PF Scheme?
Regards,
Govardhan
From India, Madras
In Chapter V of the PF Scheme 1952 on the contributions, it is mentioned that 'the contributions payable by the employer under the Scheme shall be at the rate of (ten percent) of the [basic wages, dearness allowance (including the cash value of any food concession) and retaining allowance payable to each employee to whom the scheme applies:'
What would be the implication of this definition of contribution found in the PF Scheme?
Regards,
Govardhan
From India, Madras
Thank you very much, Mr.Swastik. Your contribution to this topic is excellent and your help done to me is timely and great. Many, many thanks and great regards, Govardhan
From India, Madras
From India, Madras
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Maharashtra Special allowance Notification July 14 to Dec 14.pdf
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