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Discussion > Labour & Service Law > PF & ESI > pf basic wages   Unanswered Threads Post New Topic

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There are 5 Replies to this message


seshachala


hr executive
[ Scorecard : 47]
Posted On 03 January 2009 at 09:53 Report Abuse

please tell us that the basic wages under the epf & mp act, is it to be not less than the minimum wages of the state or is it be 60% of the gross salary.  Is there any statutory guidlines under the act or any case laws giving the guidlines in determining the basic+da wages 



AEJAZ AHMED


Legal Consultant/Lawyer
[ Scorecard : 12176]
Posted On 03 January 2009 at 13:58 Report Abuse

 


DEAR MR. SESHCHALLA,


As per the definition under Minimum wages Act - 1948, - Wages means all remuneration capable of being expressed in terms of money, which would be payable to a person employed in respect of his employment or work done in his employment and includes HOUSE RENT ALLOWANCE (w.e.f. 17/09/1957) but does not include - Gratuity, PF/ESI contribution, travelling allowance or concession, value of any facility or service extended to the employee.



Technically minimum wages can be split into:               
BASIC +DA+HRA.


But as a general practice it is understood as:                   Basic +DA.


The enforcement authorities under Minimum Wages are concerned only that the prevailing min. wages should be paid to an employee., The employer can pay the min. wages through any nomeclature as a head of wages, but it should not be less than existing min. wages in the respective State.



So with regard to your question about Basic Wages  in relation of P.F. & M.P. Act,  contribution on minimum wages:


There is no reference of Minimum wages in the definition of wages - under EPF & MP Act -1952, that is only BASIC +DA, any retaining allowane and value of food concession. No internal circular in the PF Deptt. exist regarding the enfocement of PF contribution on min. wages.



The P.F. authorities are not empowered to enforce minimum wages or ask for contribution on minimum wages.



Therefore, if there is any CASE as per your question,  you as HR person should present your case before RPFC with documentary evidence, that payment of PF Contribution has no relation with minimum wages. RPFC  shall considered your objections and may drope the matters.



Moreover; There is nothing in Labour Laws, that Basic or Basic+ DA should be at par the minimum wages or 50% of the Gross salary, these are all the industrial practices.



Deliveratly keeping Basic of an employee at minimum level so that PF. contibution become less is a unfair labour practice. The salary structure should be realistic and reasobale according to the category and level of an employee in the organisation.



Finally P.F. authority are empowered to enforce the PF Act, not the Min. Wages Act


rama


Asst. Manager HR
[ Scorecard : 36]
Posted On 13 December 2009 at 22:53 Report Abuse

Originally posted by :AEJAZ AHMED
"  DEAR MR. SESHCHALLA,As per the definition under Minimum wages Act - 1948, - Wages means all remuneration capable of being expressed in terms of money, which would be payable to a person employed in respect of his employment or work done in his employment and includes HOUSE RENT ALLOWANCE (w.e.f. 17/09/1957) but does not include - Gratuity, PF/ESI contribution, travelling allowance or concession, value of any facility or service extended to the employee.Technically minimum wages can be split into:                BASIC +DA+HRA.But as a general practice it is understood as:                   Basic +DA.The enforcement authorities under Minimum Wages are concerned only that the prevailing min. wages should be paid to an employee., The employer can pay the min. wages through any nomeclature as a head of wages, but it should not be less than existing min. wages in the respective State.So with regard to your question about Basic Wages  in relation of P.F. & M.P. Act,  contribution on minimum wages:There is no reference of Minimum wages in the definition of wages - under EPF & MP Act -1952, that is only BASIC +DA, any retaining allowane and value of food concession. No internal circular in the PF Deptt. exist regarding the enfocement of PF contribution on min. wages.The P.F. authorities are not empowered to enforce minimum wages or ask for contribution on minimum wages.Therefore, if there is any CASE as per your question,  you as HR person should present your case before RPFC with documentary evidence, that payment of PF Contribution has no relation with minimum wages. RPFC  shall considered your objections and may drope the matters.Moreover; There is nothing in Labour Laws, that Basic or Basic+ DA should be at par the minimum wages or 50% of the Gross salary, these are all the industrial practices.Deliveratly keeping Basic of an employee at minimum level so that PF. contibution become less is a unfair labour practice. The salary structure should be realistic and reasobale according to the category and level of an employee in the organisation. Finally P.F. authority are empowered to enforce the PF Act, not the Min. Wages Act "




Attached File (downloaded 153 times) :

atul dhuliya


exe
[ Scorecard : 23]
Posted On 14 December 2009 at 12:37 Report Abuse

Sir plz go through attach judement which say minimum wages means basic+da,and pf authorities will ask you to ensure pf deduction on minimum wages

Rgds

Atul




Attached File (downloaded 362 times) :

Total thanks : 1 times

VIPIN SHARMA


A.M. (ACCOUNTS)
[ Scorecard : 22]
Posted On 16 March 2010 at 11:36 Report Abuse

CAN I CONTRIBUTE as employess to  P.F AS 12% OF NOTIONAL BASIC WAGES i.e. Rs. 6500 eventhough the actual basic wages is more than Rs. 6500. As a result i will be voluntarily covered in p.f. act and i will also contribute. if i pay contrib. as per actual basic wages then it will be too costly to me and other employees of my company. 


paresh pathak


proprietor
[ Scorecard : 32]
Posted On 08 July 2011 at 21:15 Report Abuse

Dear MR Aezaj,

 

Recently PF commissioner New Delhi issued circular to their regional office citing various judgement of Hon;ble High Court Particularly M P High Court Division Bench where in referring the Judgement of Bridge & Roof CAse of Hon. Supereme Court. That Basic wages definition u/s 2(b) ii of epf & Mp Act 1952 means all emoluments.....excluding HRA D A Retaining allowance means other allowance which normally and uniformally all employees are earning i.e. conveyance, Special Allowance Medical allowance, transport allowance are basic wages.  This Judgement has great impact in the Industries.  Based on these judgement RPFC may compell employer to deduct PF on gross excluding HRA and OT.




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