IS IT RIGHT?

deepasharma · #1 (**permalink**) 05-01-2008, 04:29 PM

I recently joined a software company as manager hr and found that company is not paying PF to anybody. The employee strength is 40 right now and the company started at year ago. We are planning to hire about 50 more people by next year. What they do is, they dont pay anyone the basic salary less than 6500 even when the salary is around 9k. So i want to know whether its legal or not? Please guide me on the same.

Awaiting for response

eme3004 · #2 (**permalink**) 05-01-2008, 04:51 PM

Hi Deepa,

It is mandatory for a company employing 20 or more persons to have their employees covered under PF. If the company has not done so till date then you will have to strongly suggest them to do it. The site http://india.helplinelaw.com gives you quite a bit of information on this.

Emereen

tsivasankaran · #3 (**permalink**) 05-01-2008, 04:56 PM

Hi Deepa
There is waiting period of three years for every company. it is provided for in PF Act itself

You say that your Company is just one year old and hence legally for three years, you do not come under the purview of the Act.

After three years, you have to take a number. But if all employees are drawing more than 6500 rupess as Basi plus Da, you do not need to cover these employees legally.

This is the leagl position

Siva

deepasharma · #4 (**permalink**) 05-01-2008, 05:00 PM

thanks emreen n siva. now my question to mr.siva is...can we decide basic salary as per our convenience? like if the monthly salary is 8k for an employee can we give the basic of 7000 to him? thr must be some formula to calculate basic salary.

deepasharma · #5 (**permalink**) 05-01-2008, 05:02 PM

I mean what is the max limit of basic on CTC?

tsivasankaran · #6 (**permalink**) 05-01-2008, 05:55 PM

Dear Deepa

You can give

Basic plus DA put together should not be too low

I have come across with Basic and DA at 40 % and other allowances contributing 60%

There are prganisation giving more Basi and less on allowances

Law does not prevent you from giving more basic
It prescribes minimum basic and DA under Minimum Wages Act If you give more, it is the organisations wish

Siva

deepasharma · #7 (**permalink**) 05-01-2008, 06:19 PM

Thans Mr Siva

juhi29 · #8 (**permalink**) 06-01-2008, 11:14 AM

Dear Deepa,

As per the P.F. Act if an employees monthly basic and D.A. adds upto more than Rs 6500/- then the Co. has the option of not deducting of P.F. from the employee provided the employee agrees to it.

Also the calculation of Basic Salary is usually 40-50% of your Gross Salary.

Regards
Juin

H R SINGH · #9 (**permalink**) 07-01-2008, 12:15 PM

It is optional if basic salary exceeds Rs.6500/-. However, if there is PF deduction already made below Rs.6500/- in the establishment then consent of employee is required. Below Rs.6500/- PF deduction is mandatory. This culture is maximum prevalent in call centre industries where maximum attrition is reported. In absence of PF deduction, no statutory register in respect of PF is required to be maintained.

Regarding your second question, please note that in case of minimum salary e.g. in Haryana Rs.3510/-. The basic salary is to be kept at Rs.3510/-. Where salary is higher, basic salary can be put in the range of 40-50% of CTC. This is what the maximum companies follow.

Regards,

cgnanij · #10 (**permalink**) 07-01-2008, 12:27 PM

Thanks

Thread Tools	Search this Thread
Show Printable Version Email this Page	Search this Thread: Advanced Search
Display Modes
Linear Mode Switch to Hybrid Mode Switch to Threaded Mode