Dear Seniors Need your guidance & Suggestion on below query. Can we deduct the ESI & PF when an employees is under suspension. With Regards Prasanna Kumar
From Hong Kong
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From Hong Kong
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Dear Mr. Prasanna Kumar,
I think suspension and termination are not the same. Since the employee is under suspension, the statutory dues like ESI, PF, and PT will be deducted, but the calculation will be based on half of his basic salary.
Regards.
From India, Mumbai
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I think suspension and termination are not the same. Since the employee is under suspension, the statutory dues like ESI, PF, and PT will be deducted, but the calculation will be based on half of his basic salary.
Regards.
From India, Mumbai
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If subsistence allowance is paid to the suspended employee then the Statutory Payment like ESI, PF has to be contributed without fail. Suspension of an employee does not end the employer-employee relationship with his employer.
The Supreme Court has held that subsistence allowance forms the ‘wages’ of a suspended employee under the Employees State Insurance Act, and hence employer / employee contributions to the ESI fund must be made on the subsistence allowance. (ESIC v. Popular Automobiles, Civil Appeal No. 3850 of 1993, decided on 29.09.1997).
The Supreme Court has also compared Section 7A of the Provident Fund Act in India and Section 45A of ESI Act in Bharat Heavy Electricals Ltd v. Employee’s State Insurance Corporation (Civil Appeal No. 1271 of 2008, as decided on 14.02.2008) which gives power to inspectors under the respective statutes to initiate proceedings against employers for failure to pay contributions under the respective statutes.
From India, Ahmadabad
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787The Supreme Court has held that subsistence allowance forms the ‘wages’ of a suspended employee under the Employees State Insurance Act, and hence employer / employee contributions to the ESI fund must be made on the subsistence allowance. (ESIC v. Popular Automobiles, Civil Appeal No. 3850 of 1993, decided on 29.09.1997).
The Supreme Court has also compared Section 7A of the Provident Fund Act in India and Section 45A of ESI Act in Bharat Heavy Electricals Ltd v. Employee’s State Insurance Corporation (Civil Appeal No. 1271 of 2008, as decided on 14.02.2008) which gives power to inspectors under the respective statutes to initiate proceedings against employers for failure to pay contributions under the respective statutes.
From India, Ahmadabad
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Prasanna Kumar,
Hi,
Regarding the question of suspension, it means the employee is punished for some reason. If it is proven that his suspension is unjustified, then the company will provide full payment, and the PF and ESI deductions will be made as usual. However, if his suspension is deemed valid, he will receive 50% of his basic pay for the suspension period. Even in this case, the PF and ESI contributions will be paid.
The ESI and PF contributions will cease when the employee is on Leave Without Pay (LWP) or due to other reasons.
Regards,
Srihari
From India, Hyderabad
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Hi,
Regarding the question of suspension, it means the employee is punished for some reason. If it is proven that his suspension is unjustified, then the company will provide full payment, and the PF and ESI deductions will be made as usual. However, if his suspension is deemed valid, he will receive 50% of his basic pay for the suspension period. Even in this case, the PF and ESI contributions will be paid.
The ESI and PF contributions will cease when the employee is on Leave Without Pay (LWP) or due to other reasons.
Regards,
Srihari
From India, Hyderabad
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Hello Sir,
Suppose a person works at Company A for 9 months and then leaves to join Company B. However, when the person applies to Company C, they choose not to include their experience at Company A and only list their experience at Company B. In this case, Company A's experience will be verified.
Thanks
From India
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Suppose a person works at Company A for 9 months and then leaves to join Company B. However, when the person applies to Company C, they choose not to include their experience at Company A and only list their experience at Company B. In this case, Company A's experience will be verified.
Thanks
From India
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Hellow, deduction of PF & ESI on the wages received by the employee during the suspension period is the statutory responsibility of the employer. Eswararao Ivaturi.
From United States, Cupertino
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From United States, Cupertino
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It is correct that subsistence allowance is considered wages for ESI. However, for EPF, it is not. Referring to the definition of basic wages in the EPF Act, it states that basic means the emoluments earned by an employee while on duty, on leave, or on holidays. When a person is under suspension, they are not on duty, leave, or holiday. Therefore, the payment received as a subsistence allowance is not considered wages for PF. The case mentioned does not fall under the EPF Act but under the ESI Act.
VARGHESE MATHEW
HR/LABOUR LAW PROFESSIONAL
09961266966
From India, Thiruvananthapuram
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VARGHESE MATHEW
HR/LABOUR LAW PROFESSIONAL
09961266966
From India, Thiruvananthapuram
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Subsistance allowance is paid to the employee during the course of employment calculated at 50% of his wage, in my view deduction of PF on this amount cannot be avoided. Eswararao Ivaturi.
From United States, Cupertino
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From United States, Cupertino
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Dear Prasanna Prabhu,
I totally agree with Mr. VARGHESE MATHEW. Subsistence Allowance attracts ESI, not EPF. Mr. Saji has shared a Judgment of The Hon'ble Supreme Court in this regard. However, I would also like to share that it is clearly mentioned that "An inquiry under sub-section (1) of Section 7-A can be initiated to decide the dispute regarding the applicability of the Act." But, thereafter, no further update in this regard was issued by the EPFO.
So, until any notification from EPFO in this regard, it could not be assumed that Subsistence Allowance also attracts EPF; this is my view. The learned members can correct me if there is any discrepancy.
From India, Delhi
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I totally agree with Mr. VARGHESE MATHEW. Subsistence Allowance attracts ESI, not EPF. Mr. Saji has shared a Judgment of The Hon'ble Supreme Court in this regard. However, I would also like to share that it is clearly mentioned that "An inquiry under sub-section (1) of Section 7-A can be initiated to decide the dispute regarding the applicability of the Act." But, thereafter, no further update in this regard was issued by the EPFO.
So, until any notification from EPFO in this regard, it could not be assumed that Subsistence Allowance also attracts EPF; this is my view. The learned members can correct me if there is any discrepancy.
From India, Delhi
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Dear Prasanna,
It's simple, don't get confused. PF, ESIC, and PT will be paid on earnings, right? If they have not earned, then what will you pay?
In case salary is on hold and the employee is terminated/suspended, in that case, you have to pay the contributions to the respective departments.
Best Wishes,
Karthik
From India, Vijayawada
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It's simple, don't get confused. PF, ESIC, and PT will be paid on earnings, right? If they have not earned, then what will you pay?
In case salary is on hold and the employee is terminated/suspended, in that case, you have to pay the contributions to the respective departments.
Best Wishes,
Karthik
From India, Vijayawada
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