Pf Diduction

i couldnt understand what you mean by minimum basic . provident fund  deduction should be on basic wages and D.A., and retaining allowance if any.

Currently delhi minimum basic is 3934(basic + da) but a company diduct pf on 2984, 3600,2800, 2700,etc

As a HR executive, You should take the initiative to properly advice the management.

AS PER PF ACT ,PF DEDUCTION IS TO BE MADE FROM BASIC AND DA.IF NOT MAKE A COMPLAINT TO THE PF AUTHORITIES

Thanks Mr. Badrinath, for giving positive suggestion.   Most of the employers are not following the principle what you are suggesting.  They bifurcate the minimum wages into equal two parts, naming the first half as basic and the remaining in several parts as HRA, CCA, Conveyance etc. (whatever name they like) and deduct PF only on the first half part.

Thanks Mr.Prabhakar. normally in most of the companies, the employees are being  exploited.  statutory obligations  are denied  and  legal benefits are not given properly. one of the reason(according to me) is most of the HR managers are not legally qualified persons who are unable to properly advice the management  and some employers practice unethical standards.some of the management advocates also give wrong advice to employers and also to employees which leads to unnecessary confilicts.my view is "law should be given utmost importance".after all law has been framed to safegaurd the interest of the public, which all should realise.

I advised the management but he ignore it my sugasation.

put your suggestion in writing.have a copy with you. thats the end of your role. let the management face the consequences, if any issue comes..

Can hon'ble members of this club kindly help me to find out the answer for this question. Whether the employer has got a right to bifurcate or multifurcte the minimum wages notified by the appropriate Government? If so, is there any law, rule, bye-law, notification or any committee recommendation fixing the ratio under different heads for this bi-furcation (kindly name the rule etc.). For example, is there any rule to say at least 50% of the minimum wages should be Basic Pay, only 30% can be H.R.A or conveyance allowance etc.or it is upto the employer?

Mr.Prabhakar,

               minimum wage is the bare wage which should be given by the employer irrespective of the financial position of the company. to my knowledge,  allowances  are decided and fixed by  individual  companies and  there is no law which states that  50%  should  be  basic  and 30% should be other allowances. the companies while framing c.t.c ( cost to company) fix percentages for each component of allowances and they bifuricate the total salary  as basic/ da and other allowance such as hra, conveyance, newspaper allowance etc.

hence ( to my knowledge ) there is no such rule or notification etc.

badhrinath 

Mr. badrinath

  Are u have any rule & notification, pf diduct on minimum basic. it is very helpful for me. if  u have please send me a copy of rule & notification.

 

Thnaks & Regards

Sandy

Mr. Badrinath,

Thank you very much.  If there is any rule fixing the ration for different heads, the employer may fix only 30% of minimum wages as basic pay and the remaining amount under different heads except D.A.  and pay  the employer's PF contribution only on 30% of the minimum wages.  Would it be legal?  (not on moral grounds, but on legal grounds only I solicit the reply from you and other honourable members)

Mr. Badrinath,

Thank you very much.  If there is absence of any rule fixing the ratio for different heads, the employer may fix only 30% of minimum wages as basic pay and the remaining amount under different heads except D.A.  and pay  the employer's PF contribution only on 30% of the minimum wages.  Would it be legal?  (not on moral grounds, but on legal grounds only I solicit the reply from you and other honourable members)

 Dear Mr.Prabhakar,

                 1. there is no ratio or rule for fixation of components of wages.

                  2. law is silent  on this  and hence if employer fixes 30% of the minimum wage as basic and remaining amount as allowances, it cannot be termed as illegal, unless and until we get clear cut  judgement.( but i came to know that PF authorities are administratively instructed that while they go for PF inspection, they should insist that the employer shoud cover 50% of the minimum wages as ' basic". it seems there is no notification for this. again, this should be confirmed) 

                   2. pl. also refer 1999 AIR 2459 CASE LAW ( air frieght case) for indepth knowledge.

thanks.

Badhrinath