Dear all, Section 12 of the Employees PF Act 1952 makes it specific that an employer cannot reduce the wages of any employee to meet the liability for employer contribution. Hence if the deduction of employer contribution is made from gross salary then it is patently illegal and the employer could be even prosecuted for this. Since it is an isolated case of such deduction being carried out only from new entrants it would be appropriate to bring the aforesaid provision of the PF Act to the authorities concerned. But if the organisation still persists with the wrong practice, it is necessary to bring this to the knowledge of local PF Inspector. As regards the point raised by Shri Mahendra, the CTC is a aggregation of the entire cost incured by the employer, it includes all perks and even the per capita cost of facilities like company transport, canteen subsidy, LTC etc. There is no legal provision regarding the same.KK
From India, Bhopal
199From India, Bhopal
It is correct. PF contribution will 12% from both Employee and 13.61% from employer. PF ceiling amount is Rs.6500/- it means Rs.780 pm.
If an employee monthly PF cross Rs.780/- they may contribute only Rs.780/-, if that employee want to contribute more than Rs.780/- he may approach the concerned HR and can ask for 12% deduction only.
But some company's include company contribution of 13.61% as a part of your CTC amount.
As you mention, company contribution is mention in your appointment letter so there is noting wrong in that.
thanks
VS
From India, Delhi
If an employee monthly PF cross Rs.780/- they may contribute only Rs.780/-, if that employee want to contribute more than Rs.780/- he may approach the concerned HR and can ask for 12% deduction only.
But some company's include company contribution of 13.61% as a part of your CTC amount.
As you mention, company contribution is mention in your appointment letter so there is noting wrong in that.
thanks
VS
From India, Delhi
Dear All,
I think there is just lack of clear communication between the HR and the employee instead of any illegal practice that is discussed above. Although I will have to look into the appointment letter to give a clear point of view but including Employer's contribution in CTC is a normal practice and it is perfectly legal. You have to understand the difference between the gross salary and ctc. CTC is a figure that the organization spends on the employee and PF, ESI contribution of 12% and 4.75% respectively from employer's side is definitely part of CTC.
Certain HR practioners do not clearly show that picture to the new entrant hence this kind of confusion arises.
If any further clarification is required you can share appointment letter for better understanding.
Thanks & regards
From Pakistan
I think there is just lack of clear communication between the HR and the employee instead of any illegal practice that is discussed above. Although I will have to look into the appointment letter to give a clear point of view but including Employer's contribution in CTC is a normal practice and it is perfectly legal. You have to understand the difference between the gross salary and ctc. CTC is a figure that the organization spends on the employee and PF, ESI contribution of 12% and 4.75% respectively from employer's side is definitely part of CTC.
Certain HR practioners do not clearly show that picture to the new entrant hence this kind of confusion arises.
If any further clarification is required you can share appointment letter for better understanding.
Thanks & regards
From Pakistan
Dear Praveen,
Fist confirm me your CTC or Gross Salary because many Company offer an Employees CTC so please let me know your CTC or Gross Salary or your current Salary, in CTC Both part Contribute in Employees Salary ,
Thanks & Regards
Krishan Singh
From India, Delhi
Fist confirm me your CTC or Gross Salary because many Company offer an Employees CTC so please let me know your CTC or Gross Salary or your current Salary, in CTC Both part Contribute in Employees Salary ,
Thanks & Regards
Krishan Singh
From India, Delhi
Dear Mahender, Your CTC is correct and donot challenge the system. At the time of joining management given break-up of your salary.
From India, Delhi
From India, Delhi
Concept of CTC is correct. It will show all the spending Company is incurring towards its employee. And hence showing company’s contribution to PF a/c, in ctc is correct. Finally, it is income to an employee, which he is allowed to enjoy after few years.
In the present case, by mistake, Management has included, “EMPLOYER’S CONTRIBUTION” in employee’s monthly gross, and now they deducting the said amount from his salary, for remitting to PF authorities.
If Employee’s Gross salary is on higher side, by Rs.780, than what it should be, logically management is right to deduct this amount from monthly salary, and remit to PF authorities.
At the very outset, an honest Employee should himself accept and say that, Yes, I am getting excess gross salary, than what is assured to me.
The mistake can be rectified by reducing the monthly Gross by Rs.780.00, and then make single deduction of Rs.780.00 from employee’s salary.
Legally, Employee is right. Management cannot show both deductions (Employee + Employer) in Pay Slip (Irrespective of what CTC calculations show). However, an employee who respects moral values, will bring the mistake to concerned officers notice, and get it corrected.
From India, Mumbai
In the present case, by mistake, Management has included, “EMPLOYER’S CONTRIBUTION” in employee’s monthly gross, and now they deducting the said amount from his salary, for remitting to PF authorities.
If Employee’s Gross salary is on higher side, by Rs.780, than what it should be, logically management is right to deduct this amount from monthly salary, and remit to PF authorities.
At the very outset, an honest Employee should himself accept and say that, Yes, I am getting excess gross salary, than what is assured to me.
The mistake can be rectified by reducing the monthly Gross by Rs.780.00, and then make single deduction of Rs.780.00 from employee’s salary.
Legally, Employee is right. Management cannot show both deductions (Employee + Employer) in Pay Slip (Irrespective of what CTC calculations show). However, an employee who respects moral values, will bring the mistake to concerned officers notice, and get it corrected.
From India, Mumbai
Dear Govt and companies are looting around 50% of salary. which is already low and no company want to increase the salary.
Our labour law is made in the favor of employer and employer can mold the labour law according to their need.. its need a immediate amendment. or replaced to new one. we can see example of US UK and Canada or other countries.
From India
Our labour law is made in the favor of employer and employer can mold the labour law according to their need.. its need a immediate amendment. or replaced to new one. we can see example of US UK and Canada or other countries.
From India
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