NEW EPFO Notification (PF contribution on minimum wages) - personnel officer

asif.admire Started The Discussion:

Dear Members,

Kindly refer to the attached circular issued by EPFO on 23.05.2011 on the above subject it is mentioned that employers are bound to deduct and deposit the PF contribution on minimum wages w.e.f 01.06.2011.


Asif Iqbal

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File Type: pdf min wage not splitted- 05-2011.pdf (682.3 KB, 2237 views)
Manish Gadre -  Member Since: Mar 2011
Dear Asif

This circular is internal communication between the PF authorities. This circular is not law. Moreover, PF authorities does not have jurisdiction to enter into minimum wages question. They can only ensure that the PF is deducted on Basic+DA or not. However, due to this circular, PF authorities will now pull many employers in the enquiry under section 7A and will make the demand of differential money if any. However, if the matter is fought out till tribunal or High Court level, the chances of winning are more favourable to the employer.

muruganb68 -  Member Since: Jun 2011
Dear Mr. Igbal

I would like to draw your attention that the Pf authorities has directed through their internal order based on some recent judgment awarded saying that the minimum wages cannot be split for the purpose of PF deduction. But afterwards the concerned employer appealed to the Appellate Tribunal and based on the reason of the employer Counsels Tribunal granted the stay on the authority's order and the matter is pending before the Appellate Tribunal.

hrbuff -  Member Since: Feb 2007
Dear Manish/Murugan sirs,

recently in may-11 month we have changed the basic salary of all the entry level employees (engineers) from Rs 4800 to 5200 in gurgaon after getting the pressure from the client to ensure compliance.This change was done from April-11 and difference in PF amount was deposited.

sir would like to know what does law say on minimum wages?.what is the difference b/w min wage and basic salary? is this not madotory to deduct pf on minimum wage.


V. Balaji -  Member Since: Jul 2009
This is what the problem.

This subject is being discussed in another heading "splitting of minimum Wages for the purpose of PF contribution not permissible".

I have been suggesting the web designer of this forum that similar such discussions must be linked, so that someone who has doubt on this score and who did not have exposure to go through various suggestions and discussions on this topic, when the try to post such question, the computer must alert him to visit such and such site. Software designing must be done in that way.

Can the web designers look into this?

Now coming back to your point; the above order issued by the PF authorities does not hold water. Because, this is basically their internal circular. And PF authorities do not have locus standi to issue such orders. It is learnt that circular (attached by you here) issued by PF authorites has been quashed by PF Tribunal. However, I am yet to get copy, if any. Hence wait for some more time to know about the current status.

S. Rao -  Member Since: Jul 2011
Dear All,

I want to know how should the PF be calculated in respect of the workers who are paid on daily basis. These workers are also paid OT based on the extra work undertaken by them.

Could you please help me.



balaji345 -  Member Since: Apr 2009
Dear All,
I understand the matter in this notification is still pending with the Appellate Tribunal .Given this background, is there any urgent need to restructure employee minimum wages to be equal to basic, and other allowances applicable over and above?

emandiramesh -  Member Since: Jan 2011
Respected seniors,

This is E.Ramesh working as Sr.Personnel officer in manufacture company in chittoor. Whatever discusssed above the circullar only draft notification. It will take time for 2 Monthes. some updation will be there . we can consider after 2 monthes. we can get another circullar.



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