Hello,
My organization is thinking to adopt an idea where the Management is saying not to give the break up of the salary, instead to mention the monthly package as "Consolidated".. reason behind that one consultant has given this idea to avoid PF, ESI and other statutory benefits for the employees. My questions are :
1. Is it true that any amount (Monthly salary) if put in the bracket as "Consolidated" then employer can avoid to pay PF, ESIC etc...
2. If yes, then at the time of Gratuity, howit will b calculated. Same as if they want to deduct one day's salary what will be the thumb rule, and if employee entitle to get the compensation against leave how it will be calculated ??
3. Regarding PF, if any employee is getting basic +DA Rs.15,000/- then is it mandatory to provide the employee PF facility ?
4. Is the ESIC is necessary to maintan.. Consolidated salary if declared, then also one has to deduct the ESIC ?
Request Experts & Seniors , please guide me as early as possible. Pls do quote the rules & sections of such rules..
With best regards
From India, Bangalore
3My organization is thinking to adopt an idea where the Management is saying not to give the break up of the salary, instead to mention the monthly package as "Consolidated".. reason behind that one consultant has given this idea to avoid PF, ESI and other statutory benefits for the employees. My questions are :
1. Is it true that any amount (Monthly salary) if put in the bracket as "Consolidated" then employer can avoid to pay PF, ESIC etc...
2. If yes, then at the time of Gratuity, howit will b calculated. Same as if they want to deduct one day's salary what will be the thumb rule, and if employee entitle to get the compensation against leave how it will be calculated ??
3. Regarding PF, if any employee is getting basic +DA Rs.15,000/- then is it mandatory to provide the employee PF facility ?
4. Is the ESIC is necessary to maintan.. Consolidated salary if declared, then also one has to deduct the ESIC ?
Request Experts & Seniors , please guide me as early as possible. Pls do quote the rules & sections of such rules..
With best regards
From India, Bangalore
Dear Supriya
Only in case of Probation period of new employees we can pay salary as consolidated and avoid PF, ESIC, Bonus, Gratuity etc even it is not acceptable but it can be considered.
ESIC is anyway on gross earnings so you have to pay.
Ask your management to get rid of these consultants which could lead to major non compliance and also impacts on ethics of the organization.
Consultants has to try to help organizations to grow ethically....
Regards
Karthik
++91 81211 97979
From India, Hyderabad
Only in case of Probation period of new employees we can pay salary as consolidated and avoid PF, ESIC, Bonus, Gratuity etc even it is not acceptable but it can be considered.
ESIC is anyway on gross earnings so you have to pay.
Ask your management to get rid of these consultants which could lead to major non compliance and also impacts on ethics of the organization.
Consultants has to try to help organizations to grow ethically....
Regards
Karthik
++91 81211 97979
From India, Hyderabad
The word consolidated as the name of remuneration will not save from the liability of ESI, epf, gratuity etc.
From India, Thiruvananthapuram
From India, Thiruvananthapuram
Dear Supriya,
Who is that consultant that is giving wrong advices? He appears to have taken consulting activities without sufficient knowledge. As previous poster has said, sooner you get rid of him the better. Else his wrong advice could land in trouble.
PF, ESI are the social securities. Employees become eligible for these securities, right from their first day.
Secondly, you can take consultants take on board provided their association with you is for limited period. However, there is limit on how many consultants to take on board. Suggestion of consultant to give employees a status of consultants rests on gullibility of the PF or ESI authorities. Do you think they will not be able to see through this game? Do you think that in the history of independent India, nobody has played these tricks?
Thanks,
Dinesh Divekar
From India, Bangalore
Who is that consultant that is giving wrong advices? He appears to have taken consulting activities without sufficient knowledge. As previous poster has said, sooner you get rid of him the better. Else his wrong advice could land in trouble.
PF, ESI are the social securities. Employees become eligible for these securities, right from their first day.
Secondly, you can take consultants take on board provided their association with you is for limited period. However, there is limit on how many consultants to take on board. Suggestion of consultant to give employees a status of consultants rests on gullibility of the PF or ESI authorities. Do you think they will not be able to see through this game? Do you think that in the history of independent India, nobody has played these tricks?
Thanks,
Dinesh Divekar
From India, Bangalore
Also agree with the above seniors with their views, get rid of such consultants who will be big trouble for your in future. Secondly check the profile and client list also.
From India, Ahmadabad
From India, Ahmadabad
Even during probation ESI and PF is applicable on consolidated salary.If the salary is not splitter into basic & da etc, the whole salary can be treated as such for ESI, pf, gratuity etc.
From India, Thiruvananthapuram
From India, Thiruvananthapuram
Dear Supriya,
As fellow members already stated the decision is agst the ethics, social security, etc. Moreover it will attract higher cost in long term. Coz the more will be the basic the higher will be cost of Gratuity, Leave Encashment, Employee Compensation etc. It can be costly in short term as well. Suppose for any post the desirable-expected salary is around 12k, so what you will do. Will you will pay above 15k for that also? Moreover, if in coming time the govt increase the wages ceiling. You have to give unwanted-out of turn increment to all employees.
Escaping from statutory benefits is not any solution, rather you follow CTC term and add all the benefits in their CTC.
The forum is full of reputed Consultants, you can take their services.
Hope the idea will work for you.
From India, Delhi
As fellow members already stated the decision is agst the ethics, social security, etc. Moreover it will attract higher cost in long term. Coz the more will be the basic the higher will be cost of Gratuity, Leave Encashment, Employee Compensation etc. It can be costly in short term as well. Suppose for any post the desirable-expected salary is around 12k, so what you will do. Will you will pay above 15k for that also? Moreover, if in coming time the govt increase the wages ceiling. You have to give unwanted-out of turn increment to all employees.
Escaping from statutory benefits is not any solution, rather you follow CTC term and add all the benefits in their CTC.
The forum is full of reputed Consultants, you can take their services.
Hope the idea will work for you.
From India, Delhi
Dear sir / Madam,
1. The Consolidated pay will attract ESI,PF and Gratuity payments and contributions ... i think your consultant is advised to club all the allowance as consolidated and to fulfill the minimum wages ....
2. However your organization is conducting act apprentice and you provide stipend means it will not attract ESI , and PF contributions
Thanks
A.Ashokkumar
From India, Coimbatore
1. The Consolidated pay will attract ESI,PF and Gratuity payments and contributions ... i think your consultant is advised to club all the allowance as consolidated and to fulfill the minimum wages ....
2. However your organization is conducting act apprentice and you provide stipend means it will not attract ESI , and PF contributions
Thanks
A.Ashokkumar
From India, Coimbatore
Your management is taking a big risk if it follows the advice of your consultant. Ask your management if it is willing to pay the PF / ESI / Gratuity on the entire consolidated salary in the absence of break-up? I am sure the option suggested by your consultant will invite these consequences sooner than later.
A S Bhat
From India, Pune
A S Bhat
From India, Pune
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