Epf liability on production incentive

thakurrajivchauhan (Querist) 26 May 2012 This query is : Resolved
Respected Sir/Madam
I am working in manufacturing company and the management decided to allow the production incentive for normal 8 hrs working, that if a group of workers produces extra number of pieces as fixed standards, reduces the raw and packing materials rejection, keeping in mind the quality parameters then they will be rewarded. this practice reduces the rejection of materials, increases the production and decrease in market complaints. Now i want to know that the incentive paid as reward to workers should be included in wages for epf i.e. employer is bound to pay epf liability on incentive part which is not certain
Regards,
Rajiv Chauhan

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Sudhir Kumar, Advocate (Expert) 26 May 2012
PF is leviable on the peice rates wages.

It is for the assessing officer of EPFO to decide if it is piece wages or incentive bonus.

Suhail A.Siddiqui (Expert) 27 May 2012
Correctly advised

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