Salary revision & pf
Gladia Joy
(Querist) 27 September 2017
This query is : Open
Hi all,
I started my career just 9 months before. I am working as a HR in a startup company. The company is registered in 2014. Need your advice on the below mentioned query.
Situation: Recently one of my employee gross salary got revised from 50000/month to 30000/month because of performance issue. Instead of terminating him management offered the reduced package and the employee accepted the reduced package. His Basic salary was 17500 for 50000/month. Now I have to give the new salary break up?
Query: As per law can I reduce his basic salary from 17500 to 10500?
- If no please explain why is it not possible with supporting law or Act.
- If yes, how it will affect the PF?
Thanks in advance
Rajendra K Goyal
(Expert) 27 September 2017
All depend on the terms of appointment.
If the employee has accepted the reduced breakup, you can proceed.
Kumar Doab
(Expert) 27 September 2017
Are you still to draw the new break up of salary!
Sudhir Kumar, Advocate
(Expert) 28 September 2017
PF contribution will remain same. It can be enhanced and not reduced.
Gladia Joy
(Querist) 28 September 2017
Hi all thank you so much for the immediate response.
Mr. Rajendra K Goyal : Yes the employee has already accepted the reduced salary.
Mr. Kumar: Yeah I have given the salary break up already. But it seems like I have to revise it again. Because the basic salary has become 10500 now and I have shown PF amount accordingly. But my Auditor has called me and told we can't reduce the PF amount It can only be enhanced.
Mr Sudhir Kumar : Can you please tell me the reason for that or please specify if any law is there for that.
Thank you so much
