I want to know what is impact of new Code on Wages on Employees Provident Fund Scheme?
From India, undefined
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1From India, undefined
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In the Code of Wages, there is a definition of wage. In the recently published proposed amendment of the EPF Act, the definition of wage, instead of Basic wage, remains the same. According to the new definition, wages include Basic, DA, and Retention allowance if any, and exclude many items including HRA. There is a proviso where it is mentioned that if the other allowances are more than 50% of the wage, the extra amount above 50% (or any other % as will be declared by the appropriate government) will be added back as wage.
Therefore, PF Wage, instead of Basic, will be 67% of the monthly gross (2/3rd) and 33% other allowances (1/3rd). There is a possibility in the future that the definition of wage will be the same in all labor laws, and Gratuity may be required to be paid on a higher wage.
S K Bandyopadhyay (WB, HOWRAH)
From India, New Delhi
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Therefore, PF Wage, instead of Basic, will be 67% of the monthly gross (2/3rd) and 33% other allowances (1/3rd). There is a possibility in the future that the definition of wage will be the same in all labor laws, and Gratuity may be required to be paid on a higher wage.
S K Bandyopadhyay (WB, HOWRAH)
From India, New Delhi
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