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AJAYKUMAR NAIR (SERVICE)     01 September 2010

PF Deduction on Minimum Wages

Our Factory is located in Goa. 

Prevailing  practice in Goa is that Employers bifurcate the minimum wages in 2 parts basic 70% and rest  30% as allowances.

Pf inspector is insisting on paying Pf on full amount of Minimum wages.

Can any help me out with supporting case laws.

Thanks



Learning

 33 Replies

Reetu Dwivedi (Paralegal)     02 September 2010

* Organization if paying above minimum wages (even if Rs.1 more than M.W) can bifurcate wages as per wish. (As per Judgement of Hon.supreme Court)
* PF always calculated on BASIC + DA

   If Pf Dpt. is insisting on to deduct and contribute PF on Minimum wages + DA it is void.

 

1 Like

AJAYKUMAR NAIR (SERVICE)     02 September 2010

Thank u madam.

But the PF inspector says that Basic salary is Minimum Wages.

Eg. In goa Minimum wage is Rs.150/- per day so Pf has to be deducted on Rs.150/-. 

We cant bifurcate minimum wage ( 70% as Basic and 30% as allowance).

Reetu Dwivedi (Paralegal)     02 September 2010

Basic Wages is the meaning wages. We can’t Bifurcate the Minimum Wages because it is Basic Wages. But after most of employer Bifurcate the minimum wages that is against law. So you can also Bifurcate MW BUT- ESIC will be deduct on full minimum wages. You can’t Bifurcate Minimum wages for it. For PF you can bifurcate it. Attached is the Employees Provident Fund Tribunal, New Delhi judgment.

So, an employer is liable to pay the its share of PF contribution on the basic wages payable + other allowances permissible under the Act and not on entire minimum wages.

Hope will help you.

Regards

Reetu Dwivedi (Paralegal)     02 September 2010

Attached file

1 Like

Pratheep Kumar (Asst. Manager - HR)     03 September 2010

Mr. AJAYKUMAR NAIR

 

 

As stated by Ms. Surya Prabha, the whole minimum wages should be covered under the retirement benefits like EPF & Gratuity.  No act is providing the guidance about the bifurcate the wages in such format (70% basic & 30% allowances).

 

You have to follow the MW act to bifurcate the wages for your employees (Basic + DA).  Otherwise the EPF office will claim the damages against you. 

 

 

Regards

 

Pratheep Kumar. R

AJAYKUMAR NAIR (SERVICE)     03 September 2010

pls send the judgement copy.

Thank you

Reetu Dwivedi (Paralegal)     03 September 2010

Hi Ajay,

I am not able to attach the copy here, as system is not uploading it. Please send me your email Id.

AJAYKUMAR NAIR (SERVICE)     04 September 2010

my mail id is ajaynair100@sify.com.

Important question to be answered is that whether basic wages = minimum wages.

Reetu Dwivedi (Paralegal)     06 September 2010

Basic wages should be Equal to or more than Minimum Wages.

sangram (service)     07 September 2010

In Maharashtra Basi wages + Special Allowance is called minimum wages. PF should be calculated on Minimum wages.

What ever PF inspector is insisting does he is giving any written communication on this topic. if yes can u upload it on this site? Pls ask the base of his instructions.

Sangram

abhay (Consultanct)     17 September 2010

Dear Madam,

Myself Abhay Sanghavi Labour Law Consultant & doing practice at Mumbai

can you please mail me the Employees Provident Fund Tribunal, New Delhi judgment


Regards,

Abhay Sanghavi

abhay (Consultanct)     17 September 2010

Dear Madam,

Myself Abhay Sanghavi Labour Law Consultant & doing practice at Mumbai

can you please mail me the Employees Provident Fund Tribunal, New Delhi judgment


Regards,

Abhay Sanghavi

abhaysanghavi@yahoo.com

Sunil Kumar Sabat (Sr Manager (Legal))     13 November 2010

I am Sunil Kumar Sabat, working in Legal Department of JSL Stainless Ltd., my mail id is sabat_sunil@yahoo.co.in. Pls mail me the referred judgment, I have such a case to defend for the company, for which I will be thankful.

 

Thanx,

Sunil Sabat

09777450931

vtreddy (sr lawyer)     13 November 2010

Madam,

 

can you pl send me the cJudgement copy  on Pf issue on minimuwages  to : vltreddy999@gmail.com

 

VTREDDY


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