Dear All,
As you all knows that PF limits has been increased to 15000 basic. Now our all the employees are coming in this limit and as per govt. policy we have to deduct there PF as per rule. Because of this our company also has to bear extra costing per employee. Our management is looking for the solution that how we can escape from this extra expense because right now company can't afford this and also not growing, sales figures also has been down more then 50% from last 3 months.
Our labour law advisor is suggesting for the decrease of basic wages and increase other perks of all the employees so that pf share will be less and take there signatures on the letter as an no objection.
As per my understanding this is not the fair practice and truly un-ethical. And also it will be very difficult to convey the employees regarding decrease their basic. As per factory act rules basic salary should be 60% of gross. Then how we can decrease their salaries to less then 60%
I am planning to give all the new addition employees a letter that company is providing them PF contribution and they will not get any increment in next year. I think employees should be agree on this point. I will try to convey them that companies financial condition is not so much strong at this time and this extra cost is not affordable at this time (and this is true also). Company is giving their annual increment in the forum of PF contribution in advance 6 months before.
Kindly provide your valuable suggestions on this matter and if you found this exercise ok and ethical then kindly provide the format also to draft the letters.
Awaiting for your kind and early inputs.
Thanks & Regards
Amit Kumar
From India, Delhi
As you all knows that PF limits has been increased to 15000 basic. Now our all the employees are coming in this limit and as per govt. policy we have to deduct there PF as per rule. Because of this our company also has to bear extra costing per employee. Our management is looking for the solution that how we can escape from this extra expense because right now company can't afford this and also not growing, sales figures also has been down more then 50% from last 3 months.
Our labour law advisor is suggesting for the decrease of basic wages and increase other perks of all the employees so that pf share will be less and take there signatures on the letter as an no objection.
As per my understanding this is not the fair practice and truly un-ethical. And also it will be very difficult to convey the employees regarding decrease their basic. As per factory act rules basic salary should be 60% of gross. Then how we can decrease their salaries to less then 60%
I am planning to give all the new addition employees a letter that company is providing them PF contribution and they will not get any increment in next year. I think employees should be agree on this point. I will try to convey them that companies financial condition is not so much strong at this time and this extra cost is not affordable at this time (and this is true also). Company is giving their annual increment in the forum of PF contribution in advance 6 months before.
Kindly provide your valuable suggestions on this matter and if you found this exercise ok and ethical then kindly provide the format also to draft the letters.
Awaiting for your kind and early inputs.
Thanks & Regards
Amit Kumar
From India, Delhi
Amit,
I think an employer can keep a cap of Rs. 780 / month (based on Rs. 6500 minimum Basic). so that an employee have to go with employer option Rs .780 / month, by this you can reduce cost to company and it is not an unethical. and even employee will get more take home.
please recheck.
From India, Hyderabad
I think an employer can keep a cap of Rs. 780 / month (based on Rs. 6500 minimum Basic). so that an employee have to go with employer option Rs .780 / month, by this you can reduce cost to company and it is not an unethical. and even employee will get more take home.
please recheck.
From India, Hyderabad
Hi, Mr. Amit,
1- I appreciate your thought,
but you can not give a letter to employees regarding his Increment as per law. (I am planning to give all the new addition employees a letter that company is providing them PF contribution and they will not get any increment in next year. I think employees should be agree on this point.)
Employer has authority to give Increment or not.
2- You can manipulate his basic but his net take home will not be effected.
3- If your employees is crossing 15000 limit then just fill form no. 11 & make excluded employee to him.
One more notable point is that the ceiling limit of 15000 has not defined that it would be calculated on Basic Salary or Gross Salary.
Abhay
From India, Pune
71- I appreciate your thought,
but you can not give a letter to employees regarding his Increment as per law. (I am planning to give all the new addition employees a letter that company is providing them PF contribution and they will not get any increment in next year. I think employees should be agree on this point.)
Employer has authority to give Increment or not.
2- You can manipulate his basic but his net take home will not be effected.
3- If your employees is crossing 15000 limit then just fill form no. 11 & make excluded employee to him.
One more notable point is that the ceiling limit of 15000 has not defined that it would be calculated on Basic Salary or Gross Salary.
Abhay
From India, Pune
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