Dear All,
As per new PF guide line the splitting of minimum wages further into basic, hra, conveyance and other allowances is not allowed rather the entire minimum wages should be considered as basic (for the purpose of pf calculation). But I have gone through a recent judgement on that by the high court of punjab and haryana where it has clearly stated that minimum wage can be further splitted into Basic, HRA, Conveyance and other allowances and thus pf contribution should be calculated on bifurcated basic (less than minimum wages). can someone guide me the actual scenario and what structure should I follow in making of the salary structure?
Regards,
DG
From India, Calcutta
1As per new PF guide line the splitting of minimum wages further into basic, hra, conveyance and other allowances is not allowed rather the entire minimum wages should be considered as basic (for the purpose of pf calculation). But I have gone through a recent judgement on that by the high court of punjab and haryana where it has clearly stated that minimum wage can be further splitted into Basic, HRA, Conveyance and other allowances and thus pf contribution should be calculated on bifurcated basic (less than minimum wages). can someone guide me the actual scenario and what structure should I follow in making of the salary structure?
Regards,
DG
From India, Calcutta
Dear Mr. DG
The employees engaged in any office must be paid with the Minimum Wages and for which we have to deduct the PF. What is the purpose of cutting short of the PF Amount? Whether to deprieve the benefit of the employee or to control the remittance of PF Amount in less value, it should be paid fully.
Because it is the only savings available with the employees. Do not curtail their previleges. In addition to the Minimum Wages you can give them HRA, Conveyance, Food Subsidy etc, either in kind or in cash (as allowance or reimbusement) for which you can make the payment through vouchers instead of entering in Pay sheet.
From India, Kumbakonam
The employees engaged in any office must be paid with the Minimum Wages and for which we have to deduct the PF. What is the purpose of cutting short of the PF Amount? Whether to deprieve the benefit of the employee or to control the remittance of PF Amount in less value, it should be paid fully.
Because it is the only savings available with the employees. Do not curtail their previleges. In addition to the Minimum Wages you can give them HRA, Conveyance, Food Subsidy etc, either in kind or in cash (as allowance or reimbusement) for which you can make the payment through vouchers instead of entering in Pay sheet.
From India, Kumbakonam
DG's doubt is genuine that there is a court ruling in G4S Security Agency's case that the employer can split the minimum wages and that was held before this new circular of the Central PF Commissioner was issued. The same circular has been questioned in the PF Appellate Tribunal also. Therefore, the fate of the circular is still unclear though the PF organisation has given a clarification that the Enforcement on the minimum wages can be made even when the case is pending with the Appellate body.
I would like to add one more thing that if it is to make contributions on the minimum wages and if the minimum wages is more than Rs 6500, then can the circular stand? No, not at all. The circular does not say that ' if the minimum wages is less than Rs 6500, no bifurcation of the wage is allowed' but is a general circular directing to follow the minimum wages as PF qualifying salary. Still the very object of the circular is good as it intends to fix those who bifurcate the wages into small compartments just to reduce the burden of their PF. It is clear from the wordings of the circular that it is "beyond logic and rationale that an establishment which can not pay even minimum wages to its employees, would be willing to pay allowances to them".
Regards,
Madhu.T.K
From India, Kannur
I would like to add one more thing that if it is to make contributions on the minimum wages and if the minimum wages is more than Rs 6500, then can the circular stand? No, not at all. The circular does not say that ' if the minimum wages is less than Rs 6500, no bifurcation of the wage is allowed' but is a general circular directing to follow the minimum wages as PF qualifying salary. Still the very object of the circular is good as it intends to fix those who bifurcate the wages into small compartments just to reduce the burden of their PF. It is clear from the wordings of the circular that it is "beyond logic and rationale that an establishment which can not pay even minimum wages to its employees, would be willing to pay allowances to them".
Regards,
Madhu.T.K
From India, Kannur
The judgement by the Punjab and Haryana High Court is yet to be endorsed by the Central PF Commissioner.
Therefor till now as per PF office record Splitting of Minimum wages for the purpose of curtail of PF contribution
is not allowed.
From India, Patiala
Therefor till now as per PF office record Splitting of Minimum wages for the purpose of curtail of PF contribution
is not allowed.
From India, Patiala
Dear
Pls see https://www.citehr.com/285737-legal-...#axzz1WJ1p0i4f the Circular relying on the Judgment is there.
rajanlawfirm
From India, Madras
Pls see https://www.citehr.com/285737-legal-...#axzz1WJ1p0i4f the Circular relying on the Judgment is there.
rajanlawfirm
From India, Madras
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Delhi - Minimum Wages w.e.f. 01.10.2012 (1).pdf
Minimum Wages in Maharashtra for the period January 2018 to June 2018.xls