Subsistent Allowance Act

Though it is commonly held that subsistence allowance paid to an employee during suspension is not wage since the said allowance is paid to him for his subsistence and not for any work, done by him, the decision of the Apex Court in ESIC v. Popular Automobiles, 1998 I LLJ 621, 1997 II CLR 1003; has examined the issue from the perspective whether subsistence allowance is a wage. It held that suspension, pending enquiry does not end employer employee relationship and hence suspended employee is to be treated on par with regular employees and therefore subsistence allowance paid to him forms part of the wages and ranks for ESIC deduction. Since Employees Provident Fund Act is also a beneficial legislation as ESI Act, the same principle can be applied to EPF contributions also. Therefore, it would be also appropriate to effect deductions of PF contributions from the subsistence allowance payable to a suspended employee.

No need to deduct regards rpartha