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