provident basic wages
seshachala
(Querist) 02 January 2009
This query is : Resolved
please tell us is it mandatory for the pf basic wages to be the minimum wages of the state or the basic wages to be 60% of the gross salary while computing the employee provident fund contributions
seshachala
(Querist) 02 January 2009
please let me know about epf basic wages is to be minimum wages of the state if so please give case law reference
Guest
(Expert) 03 January 2009
The law is not clear in this regard. In Employees PF & Misc. Provisions Act, the basic wages have been defined at S. 2(b) as all the emoluments except the cash value of food concession, the D.A., H.R.A.,Over time allowance,bonus commission or any similar allowance. Now, there is no provision in Minimum Wages Act, that how much percentage of minimum wage shall be basic pay. Whether the entire wage is Basic Pay or only 50% or 60% can be basic pay and remaining amount can be treated as H.R.A. and other allowances. It is seen that most of the employers have been paying the minimum wages by bi-furcating it in such a fashion that 50% is Basic Pay and the remaining amount is under different heads such as H.R.A., which will not attract PF. In your case, it has to be seen what while Minimum Wages are being paid to the employees, how much money is being paid under the head of Basic Pay and PF can be paid only on that amount, even though personally I believe that the entire Minimum Wage is the Basic Pay and its bi-furcation, I cannot support.
Adv.Shine Thomas
(Expert) 22 January 2009
The law is not clearly specify that point.I agree with the above view.
Hiralal Das
(Expert) 08 April 2009
Thanks all of you the ld. members.
Author please clearly specify.
