Dear experts, Our company is enrolling few employees in PF from this month (May 2013). For that, we have made some changes in their salary structure and have reduced their basic salary to adjust with the PF percent deduction. Please suggest if reducing the basic salary is right? Will that have any bad impact on the employees career ahead?
From India, Chennai
4From India, Chennai
Dear Member
If the employees also includes those falling in definiition of "workman", you can not reduce the Basic salary unilaterally as it has several legal implication. You can do so by entering into some settlement with them/union where you can propose to protect Total Benifits, including projected ones.(retiral/allowances linked with basics)
For supervisory(executives) you should do with the same principle with having clear and precise communications to set the right perspective to avoid any misunderstanding/perception to employees.
The objetive of compnay should be genuine, else would be bounced.
Regards
Shailesh Parikh
Vadodara, Gujarat
99 98 97 10 65
From India, Mumbai
If the employees also includes those falling in definiition of "workman", you can not reduce the Basic salary unilaterally as it has several legal implication. You can do so by entering into some settlement with them/union where you can propose to protect Total Benifits, including projected ones.(retiral/allowances linked with basics)
For supervisory(executives) you should do with the same principle with having clear and precise communications to set the right perspective to avoid any misunderstanding/perception to employees.
The objetive of compnay should be genuine, else would be bounced.
Regards
Shailesh Parikh
Vadodara, Gujarat
99 98 97 10 65
From India, Mumbai
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Basic Pay for EPF Contribution-re duction not permissible.doc x
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