Contract labour wages - is 50% of Minimum wage as Basic for PF calculation? - CiteHR
Madhu.T.K
Industrial Relations And Labour Laws
Santu203
Labour Law/ir
Dlghr89
Head Hr - Mahindra Aerospace
Mahesh_nlr
Hr & Admin
+1 Other

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Dear Sirs, The minimum wages for contract labour in Andhra Pradesh is Rs. 4030.
While paying them, we are dividing the salary as Basic 2015 / Allowances as 2015. i.e is 50% of Minimum wage as Basic for PF calculation. Is it correct? If not, what will be basic. Please guide me in this regards.
with regards,
Mahesh
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Hi,
Kindly refer to your local minimum wage notifications.
It very clearly defines what is the basic and what the dearness allowance for each category of skill and geopgraphical wage zone. The same needs to be followed.
So your way of calulating 50 - 50 on basic and allowance may not be in line the requirements.
Kind regards
Dayanand L Guddin
Dear
As per min wages govt as fix only BA+DA there is no other other allowence inculeded so you have to dedected the PF as per min wages (means Rs. 4030) other wise liability will comes to company
Regards
Santhosh
normally labours do not want to get deducted pf as they are not aware of withdrawal process and job changes are frequent,it is interest f labour to show basic pay less for pf calculation and given hra above that to make it for minimum wage. is there anything wrong in it because govt wants minimum wage shd be given only
The EPF authorities are likely to come out with a demand that PF should be contributed at least on the minimum wages fixed by the government. As per present Act of EPF, it is okay if you contribute PF on basic salary only. But the PF being a social security measure meant for poor labourers the demand of the EPF Organisation requiring to contribute PF on a higher amount, like that on Minimum Wages, can not be ruled out by any higher authority including the courts. There are a lot of cases being fought against EPF countering their demand to pay PF on higher amounts but decisions on many cases are still pending. Once a common verdict is made, it will become a statute and make the employer liable to contribute at least on total minimum wages.
Regards,
Madhu.T.K
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