PF Wages Most Urgent
Arihant AC
(Querist) 03 July 2008
This query is : Resolved
Dear Friends
I want to know that the firm in which I am working recently P.F. Officer has taken Visit. In which he has disallowed Allowance which were paid to Employee. We received Basic + D.A , Fixed HRA, Transportation, FLTA, Uniform Washing, Sal Diff, Others Allow., in which PF is deduct on Basic + DA, Salary Diff, Others Allow., while ESIC is deduct on Basic + DA, Fixed HRA, Salary Diff, FLTA, Others Allow., The Gross Salary is as per minimum wages in which 50% of minimum wages is Basic + DA in Salary. Bonus is also calculated on Gross salary. The PF officer refused it by saying that this things are not allowed while Labour officer accept this things. Also ESIC Officer has no objection. I wanted to know about my stand. please advise.
H. S. Thukral
(Expert) 03 July 2008
what I understand from the description given by you is that you are paying a minimum wage to the employee which includes all the allowances too and PF is not deducted on the toal salary but only on basic+DA. PF should be deducted on minimum wage because in this way you are trying to reduce the contribution towards the fund. Provident Fund Officer advice is correct. In ESI the deduction is made on total wage and thus ESI inspector has not raised any objection.
In nutshell you have to pay the PF on minimum wage whether or not it includes allowance which donot come under the definition of wage in PF Act
