Pls go throgh the attachment containing a clarification on considering minimum wages as base for PF contribution. I could not understand how such clarification can be given when both the EPF & MP Act and MW Act are defining the basic wage and wage differently. In the light of the prevailing law, how far such clarification can sustain?
From India, New Delhi
From India, New Delhi
Dear Amit,
This notification is for those organizations, where minimum wages are bifurcated between Basic + DA + Special allowance and any other head. So they can reduce employer's PF contribution.
This is not right practice. According to this notification all organization should pay minimum wages & give PF on the same. Allowances are added advantages for employee apart from minimum wages.
Regards,
Tejal Shah
Executive - HR
SRPL
From India, Vadodara
This notification is for those organizations, where minimum wages are bifurcated between Basic + DA + Special allowance and any other head. So they can reduce employer's PF contribution.
This is not right practice. According to this notification all organization should pay minimum wages & give PF on the same. Allowances are added advantages for employee apart from minimum wages.
Regards,
Tejal Shah
Executive - HR
SRPL
From India, Vadodara
Dear TJ,
I am concerned with those Organization where the Salary includes basic and HRA which would come under minimum wages Act but would not be considered for EPF & MA Act. In such circumstances what would be the proper recourse?
From India, New Delhi
I am concerned with those Organization where the Salary includes basic and HRA which would come under minimum wages Act but would not be considered for EPF & MA Act. In such circumstances what would be the proper recourse?
From India, New Delhi
Is not it is good topic to discuss? More than 200 viewed this one but comented by one only!
From India, New Delhi
From India, New Delhi
Dear Amit,
It is a good topic but nothing much to be discussed on it.
As the circular attached by you itself clarifies what is what. As far as PF is concerned, para 6 reiterated definition given in PF Act and para 11 underlines the same by combining MW Act with the above definition. Amt of basic wage and minimum wage should be one-and-the-same. Basic wage consists of Basic wage + DA (which varies depend on the CPI in every 6 month) and total salary can be any other additional benefits offered by the employer. As mentioned in para 10, minimum amt an employee should get for his sustenance should be Basic wage (Basic + DA - wherever applicable) and rest everything is a bonus.
Hope I could brief to you to some extent.
Suresh
From India, Pune
65It is a good topic but nothing much to be discussed on it.
As the circular attached by you itself clarifies what is what. As far as PF is concerned, para 6 reiterated definition given in PF Act and para 11 underlines the same by combining MW Act with the above definition. Amt of basic wage and minimum wage should be one-and-the-same. Basic wage consists of Basic wage + DA (which varies depend on the CPI in every 6 month) and total salary can be any other additional benefits offered by the employer. As mentioned in para 10, minimum amt an employee should get for his sustenance should be Basic wage (Basic + DA - wherever applicable) and rest everything is a bonus.
Hope I could brief to you to some extent.
Suresh
From India, Pune
Dear amit,
I am deeply concerened about this and let me tell you that as per latest judgement from Punjab & Haryana High court we were allowed to bifercate min wages into basic+ DA + Allowances.
In the perview of that the notice issued by Add. central commissioner(compl) is biased one and against the court judgement. We had already written a strong reply to the Commissioner in this regard. Abstract is as below:
Dated : 25th May, 2011
The Addl. Central P.F. Commissioner (Compliance)
Bhavishya Nidhi Bhawan
14, Bhikaji Cama Place
New Delhi - 110 066.
Splitting of Minimum Wages for Provident Fund contributions
Sir,
Our attention has been invited to your Circular No. Coord/4(6)2003/Clarification/Vol-II/7394 dated 23.5.2011 under the caption of “Splitting of minimum wages for the purpose of Provident Fund contribution not permissible”.
While we appreciate the efforts made in digging out the old cases even from 1961 onwards and concluding ‘wherever the matter regarding splitting of wages is challenged or pending in a court of law, the stand of department alongwith all rules and guidelines of Hon’ble Supreme Court should be effectively utilised to defend the case. It is also mentioned that nothing said above shall come in way of implementation/execution of any order of a court of law’ . However, we must say that the conclusion drawn in your circular is bereft of any merit, devoid of legality and a sheer ‘colourable exercise’ by turning Nelson's eye to the latest judicial pronouncement directly on the subject.
Much emphasis has been laid down on the judgment of Division Bench of Karnataka High Court in the matter of G4S Guardings Limited vs. RPFC and the judgment of Supreme Court in Airfreight Ltd. vs. State of Karnataka & Ors. In fact, the main issue of ‘wages’ got obfuscated in the judgment of Karnataka High Court. It did not settle the law with regard to splitting of minimum wages for Provident Fund contributions hence; no weightage can be accorded to it since it had been left open to the Authorities to decide. But it hardly needs to be underlined that they (Authorities) can never go beyond the parameters as laid down by the legislature defining ‘wages’ under clause (h) of the Minimum Wages Act, 1948 and sub-section (b) of section 2 of the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952. Needless to state, that at the time of enactment of section 2(b) defining ‘basic wages’ under the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952, the definition of wages was already there under the Minimum Wages Act, 1948.
So far as the case of Airfreight Limited (supra) is concerned, this has not been under the Employees’ Provident Funds & Miscellaneous Provisions Act but in different context.
Therefore, the recent judgment of Punjab and Haryana High Court, in the case of Assistant Provident Fund Commissioner, Gurgaon vs. G4S Security Services (India) Ltd. & Anr, 2011 LLR 316 (P&H HC), is the only direct judgment on the subject of splitting of wages for the purpose of provident fund contribution, which has unequivocally and unambiguously permitted for splitting the minimum wages for the purposes of the Provident Fund. Strangely, this landmark judgment has been overlooked in the Circular for the reasons beyond anybody’s comprehension, although one of the officers of Provident Fund Department was the Party - rather Petitioner to it - and he was duly represented by an Advocate. The impugned circular, thus, appears to be motivated to supersede the judgment which could be only modified by an amendment in the Act and not by (a) overstepping a contested judgment of Punjab & Haryana High Court (b) by usurping the domain of the legislature. It is also inexplicable as to why this Circular was not issued for over seven long years after the judgment of the Karnataka High Court but issued with tearing haste i.e. within two months of the reported judgment of Punjab & Haryana High Court. The interpretations as given in the Circular are against the principles of interpretation.
It is pertinent to state here that both the cases of Karnataka High Court and the judgment of Supreme Court in the Airfreight Limited as relied upon in the Circular have been discussed and distinguished by the Hon’ble Punjab and Haryana High Court in detail.
Hence, in the fitness of administrative wisdom and the obligations of an Autonomous Body to honour the sanctity of High Court judgment, the impugned Circular may kindly be withdrawn and the gist of Punjab & Haryana High Court be circulated. It is desirable that a corrigendum be issued immediately in the larger interest of public otherwise; this so-called clarification Circular will confuse, confound and complicate the matter resulting into the opening of the sluice gate of litigation and harassment.
Thanking you,
regards
Manish Gupta
From India, Mumbai
I am deeply concerened about this and let me tell you that as per latest judgement from Punjab & Haryana High court we were allowed to bifercate min wages into basic+ DA + Allowances.
In the perview of that the notice issued by Add. central commissioner(compl) is biased one and against the court judgement. We had already written a strong reply to the Commissioner in this regard. Abstract is as below:
Dated : 25th May, 2011
The Addl. Central P.F. Commissioner (Compliance)
Bhavishya Nidhi Bhawan
14, Bhikaji Cama Place
New Delhi - 110 066.
Splitting of Minimum Wages for Provident Fund contributions
Sir,
Our attention has been invited to your Circular No. Coord/4(6)2003/Clarification/Vol-II/7394 dated 23.5.2011 under the caption of “Splitting of minimum wages for the purpose of Provident Fund contribution not permissible”.
While we appreciate the efforts made in digging out the old cases even from 1961 onwards and concluding ‘wherever the matter regarding splitting of wages is challenged or pending in a court of law, the stand of department alongwith all rules and guidelines of Hon’ble Supreme Court should be effectively utilised to defend the case. It is also mentioned that nothing said above shall come in way of implementation/execution of any order of a court of law’ . However, we must say that the conclusion drawn in your circular is bereft of any merit, devoid of legality and a sheer ‘colourable exercise’ by turning Nelson's eye to the latest judicial pronouncement directly on the subject.
Much emphasis has been laid down on the judgment of Division Bench of Karnataka High Court in the matter of G4S Guardings Limited vs. RPFC and the judgment of Supreme Court in Airfreight Ltd. vs. State of Karnataka & Ors. In fact, the main issue of ‘wages’ got obfuscated in the judgment of Karnataka High Court. It did not settle the law with regard to splitting of minimum wages for Provident Fund contributions hence; no weightage can be accorded to it since it had been left open to the Authorities to decide. But it hardly needs to be underlined that they (Authorities) can never go beyond the parameters as laid down by the legislature defining ‘wages’ under clause (h) of the Minimum Wages Act, 1948 and sub-section (b) of section 2 of the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952. Needless to state, that at the time of enactment of section 2(b) defining ‘basic wages’ under the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952, the definition of wages was already there under the Minimum Wages Act, 1948.
So far as the case of Airfreight Limited (supra) is concerned, this has not been under the Employees’ Provident Funds & Miscellaneous Provisions Act but in different context.
Therefore, the recent judgment of Punjab and Haryana High Court, in the case of Assistant Provident Fund Commissioner, Gurgaon vs. G4S Security Services (India) Ltd. & Anr, 2011 LLR 316 (P&H HC), is the only direct judgment on the subject of splitting of wages for the purpose of provident fund contribution, which has unequivocally and unambiguously permitted for splitting the minimum wages for the purposes of the Provident Fund. Strangely, this landmark judgment has been overlooked in the Circular for the reasons beyond anybody’s comprehension, although one of the officers of Provident Fund Department was the Party - rather Petitioner to it - and he was duly represented by an Advocate. The impugned circular, thus, appears to be motivated to supersede the judgment which could be only modified by an amendment in the Act and not by (a) overstepping a contested judgment of Punjab & Haryana High Court (b) by usurping the domain of the legislature. It is also inexplicable as to why this Circular was not issued for over seven long years after the judgment of the Karnataka High Court but issued with tearing haste i.e. within two months of the reported judgment of Punjab & Haryana High Court. The interpretations as given in the Circular are against the principles of interpretation.
It is pertinent to state here that both the cases of Karnataka High Court and the judgment of Supreme Court in the Airfreight Limited as relied upon in the Circular have been discussed and distinguished by the Hon’ble Punjab and Haryana High Court in detail.
Hence, in the fitness of administrative wisdom and the obligations of an Autonomous Body to honour the sanctity of High Court judgment, the impugned Circular may kindly be withdrawn and the gist of Punjab & Haryana High Court be circulated. It is desirable that a corrigendum be issued immediately in the larger interest of public otherwise; this so-called clarification Circular will confuse, confound and complicate the matter resulting into the opening of the sluice gate of litigation and harassment.
Thanking you,
regards
Manish Gupta
From India, Mumbai
Dear all, I would like to know that we can deduct the amout of pf enployee contribution from the employee wages where the company is paying employee minimum wage.
From India, New Delhi
From India, New Delhi
Thank You M G. Gone through the Judgement by Chandigarh High Court. I Just could not under stand as how EPFOover look such a straight and to the point Judgement, Moreover over looking the judgement and giving such clarification the concern officer is commiting Contempt of Court.
From India, New Delhi
From India, New Delhi
Sir,
The Addl. Central PF Commissioner-I (Compliance), New Delhi issued Order No. Co-ord/3(6)2011/Amendment Scheme/13637, Dtd. 28.8.2014 on enhancing statutory wage ceiling from existing Rs. 6,500/- to Rs. 15,000/-, fixing minimum pension of Rs. 1,000/- per month and 20% additional relief on the amount of assurance benefit admissible under EDLI Scheme 1976.
I request for clarification whether I am eligible revised pension from present Rs.1900/- since August, 2014.
From India, Visakhapatnam
The Addl. Central PF Commissioner-I (Compliance), New Delhi issued Order No. Co-ord/3(6)2011/Amendment Scheme/13637, Dtd. 28.8.2014 on enhancing statutory wage ceiling from existing Rs. 6,500/- to Rs. 15,000/-, fixing minimum pension of Rs. 1,000/- per month and 20% additional relief on the amount of assurance benefit admissible under EDLI Scheme 1976.
I request for clarification whether I am eligible revised pension from present Rs.1900/- since August, 2014.
From India, Visakhapatnam
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PF Contribution on Leave Encashment - Clarification by EPFO.pdf