Dear Sirs
Minimum wages notification issued by the West Bengal Govt states that the workers employed on high rise building or any structure over 30 ft in height shall be paid 20% of the minimum wages fixed under the notification for appropriate category as extra wages (please refer point No (d) in page 4). Copy of the notification issued by the West Bengal Govt is enclosed herewith:
Contractors are paying the provident fund contributions only on the minimum wages fixed by the West Bengal Govt as the "Extra Wages" is not being paid/not applicable currently to any worker.
Contractors will shortly be engaging their workers to work on high rise structure and will be paying the extra wages to their workers as per the notification.
However, the extra wages will not be paid universally or ordinarily for all workers. Extra wages will be paid only to those who work at height to compensate their nature of work as per the notification. Therefore, generally this wages will not be earned by all workers at project.
We would like to know whether such wages payable by a way of extra wages as fixed by the notification (on account of work on high rise structure) should be considered as basic wages for the purpose of payment of provident fund contribution.
Request if you could help us with your legal views as to further advise contractors to comply accordingly.
From India, Kolkata
161Minimum wages notification issued by the West Bengal Govt states that the workers employed on high rise building or any structure over 30 ft in height shall be paid 20% of the minimum wages fixed under the notification for appropriate category as extra wages (please refer point No (d) in page 4). Copy of the notification issued by the West Bengal Govt is enclosed herewith:
Contractors are paying the provident fund contributions only on the minimum wages fixed by the West Bengal Govt as the "Extra Wages" is not being paid/not applicable currently to any worker.
Contractors will shortly be engaging their workers to work on high rise structure and will be paying the extra wages to their workers as per the notification.
However, the extra wages will not be paid universally or ordinarily for all workers. Extra wages will be paid only to those who work at height to compensate their nature of work as per the notification. Therefore, generally this wages will not be earned by all workers at project.
We would like to know whether such wages payable by a way of extra wages as fixed by the notification (on account of work on high rise structure) should be considered as basic wages for the purpose of payment of provident fund contribution.
Request if you could help us with your legal views as to further advise contractors to comply accordingly.
From India, Kolkata
In my opinion, when extra wage i.e.@20% over and above to the minimum wage is notified and declared under the minimum wages act, it shall be deemed to be basic wage and EPF contribution is accordingly payable.
P K Sharma
From India, Delhi
P K Sharma
From India, Delhi
Dear Sir Sorry , I forgot to attach the notification. Please see the 4th Page Point no.d).
From India, Kolkata
From India, Kolkata
Dear Ghosh'
i have gone through your notification and 20% extra to be paid if worker works on above 30ft building or high raises or in tunnels.you understand one thing that once you pay provident fund on certain amount than it can not be reduced but in this particular case when same worker will work on ground than this 20% amount will not be given to him and now the PF wages can nlot be reduced.so better you pay PF on minimum wages and sho this as high raise allowance and donot deduct PF on it
From India, Delhi
i have gone through your notification and 20% extra to be paid if worker works on above 30ft building or high raises or in tunnels.you understand one thing that once you pay provident fund on certain amount than it can not be reduced but in this particular case when same worker will work on ground than this 20% amount will not be given to him and now the PF wages can nlot be reduced.so better you pay PF on minimum wages and sho this as high raise allowance and donot deduct PF on it
From India, Delhi
Dear Mr Ghosh and Mr. Malik
The 20% extra wage is a part of minimum wage and as such it is not a allowance. It is a similar case to the minimum wages notification of Himachal Pradesh Government where they allow 25% extra wage for the persons deployed in snow bound areas.
In my opinion, the 20% extra wage is purely minimum wage and EPF contribution is payable.
P K Sharma
From India, Delhi
The 20% extra wage is a part of minimum wage and as such it is not a allowance. It is a similar case to the minimum wages notification of Himachal Pradesh Government where they allow 25% extra wage for the persons deployed in snow bound areas.
In my opinion, the 20% extra wage is purely minimum wage and EPF contribution is payable.
P K Sharma
From India, Delhi
Dear Sir
Thanks a lot.
I have the same doubt, whether it will attract PF or not.
height allowance is paid to worker who works at a height of 30 feet or more.Since PF wage does not include height allowance. Its only basic plus DA/COLA whatever we say.
But it can be considered only when it is given to all employees and not to some employees for doing some different work.It will not be considered for PF since we are giving them to work differently , at height.Tomorrow if their role change you will not give this allowance.Hence it will not attract PF
From India, Kolkata
Thanks a lot.
I have the same doubt, whether it will attract PF or not.
height allowance is paid to worker who works at a height of 30 feet or more.Since PF wage does not include height allowance. Its only basic plus DA/COLA whatever we say.
But it can be considered only when it is given to all employees and not to some employees for doing some different work.It will not be considered for PF since we are giving them to work differently , at height.Tomorrow if their role change you will not give this allowance.Hence it will not attract PF
From India, Kolkata
Dear Mr Soubhik Ghosh,
I am still feeling un-comfirtable in accepting your idea of violation of Section 12 of the EPF & MP Act, if the role of such employees change later on and this extra wage is withdrawn.
Section 12 says :- No employer in relation to an establishment to which any Scheme or the Insurance Scheme applies shall, by reason only of his liability for the payment of any contribution to the Fund or the Insurance Fund or any charges under this Act or the Scheme or the Insurance Scheme reduce whether directly or indirectly, the wages of any employee to whom the Scheme or the Insurance Scheme applies or the total quantum of benefits in the nature of old age pension, gratuity, provident fund or life insurance to which the employee is entitled titled
under the terms of his employment, express or implied.
But in this case, we will not be violating the terms of the section at that stage, since their special provision of the minimum wage will not be applicable which results reduction. It is not a case where we are altering / tailoring the wage into allowances just to deprive the workers from their EPF benefit.
Kindly share your views as well.
P K Sharma
From India, Delhi
I am still feeling un-comfirtable in accepting your idea of violation of Section 12 of the EPF & MP Act, if the role of such employees change later on and this extra wage is withdrawn.
Section 12 says :- No employer in relation to an establishment to which any Scheme or the Insurance Scheme applies shall, by reason only of his liability for the payment of any contribution to the Fund or the Insurance Fund or any charges under this Act or the Scheme or the Insurance Scheme reduce whether directly or indirectly, the wages of any employee to whom the Scheme or the Insurance Scheme applies or the total quantum of benefits in the nature of old age pension, gratuity, provident fund or life insurance to which the employee is entitled titled
under the terms of his employment, express or implied.
But in this case, we will not be violating the terms of the section at that stage, since their special provision of the minimum wage will not be applicable which results reduction. It is not a case where we are altering / tailoring the wage into allowances just to deprive the workers from their EPF benefit.
Kindly share your views as well.
P K Sharma
From India, Delhi
Dear Mr.P.K.Sharma
`Let me just share a practical view on this & also affirm to the opinion/analogy as stated under:
As we all are aware that PF only gets attracted wherever the earnings have the characteristic of being 1) ORDINARILY contributing to the earnings, 2) NECESSARILY
Contributing to the earnings, & 3) UNIVERSALLY applicable to all the employees. In our case, either of the 03 elements are not getting attracted - 1) NOT ORDINARILY, as
it is temporary in nature & hence not allowed in the ordinary course of operations, as there exists a provision of "working on structure over 30 feet height", 2) likewise, NOT
NECESSARILY because if the same employee works at surface or below the threshold height of 30 feet limit, then this privilege would not be allowed to him, & 3) This
element of earning is NOT UNIVERSALLY allowed to all other employees in the category."
So keeping the above in mind, it is evident that the PF element would not applicable on the "20% of Minimum wages as extra wages/height allowance to workers employed on High rise building or any structure over 30 feet height". Copy of the Hon’ble Supreme Court judgement in "Jay Engineering Works Ltd v Union of India" has been shared with you in this mail.
From India, Kolkata
`Let me just share a practical view on this & also affirm to the opinion/analogy as stated under:
As we all are aware that PF only gets attracted wherever the earnings have the characteristic of being 1) ORDINARILY contributing to the earnings, 2) NECESSARILY
Contributing to the earnings, & 3) UNIVERSALLY applicable to all the employees. In our case, either of the 03 elements are not getting attracted - 1) NOT ORDINARILY, as
it is temporary in nature & hence not allowed in the ordinary course of operations, as there exists a provision of "working on structure over 30 feet height", 2) likewise, NOT
NECESSARILY because if the same employee works at surface or below the threshold height of 30 feet limit, then this privilege would not be allowed to him, & 3) This
element of earning is NOT UNIVERSALLY allowed to all other employees in the category."
So keeping the above in mind, it is evident that the PF element would not applicable on the "20% of Minimum wages as extra wages/height allowance to workers employed on High rise building or any structure over 30 feet height". Copy of the Hon’ble Supreme Court judgement in "Jay Engineering Works Ltd v Union of India" has been shared with you in this mail.
From India, Kolkata
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PF Contribution on Leave Encashment - Clarification by EPFO.pdf