Query
Dear members, Can PF contribution be paid by splitting minimum wages ? Has any industry started this practice or it is legal now ? Regards,

18th September 2011 From India, Delhi

PARTICIPATING IN DISCUSSION:
Octavious
Hr Manager
Psdhingra
Legal Analyst, Hrm, Domestic/ Departmental
Sumitk.saxena
Service/manager-hr
Natraj@sakthimanagement.com
Head - Outsourcing
V. Balaji
Ir & Hr
Pradeepanckumaran
Accounts, Finance & Admin
Shreedhar Kantharia
Professionally - Expertise On Generic Hr/
Jimmii
Ehs Specialist
Kvictor99
Practicing Hr And Ir
Mayurichourasiya
Assistant Manager Hr
+7 Others

Dear Naresh Yes, U can split minimum wages but u can not split minimum wages in Gurgaon only ? because in gurgaon commissioner had issue notification that u cant split minimum wages? Brijesh Saxena
19th September 2011 From India, Gurgaon
Dear Naresh,
Greetings for the day,
As per Hon'ble Supreme Court Judgement minimum wages is the component of basic+da/vda so it can't be spiltted rather contribution will be paid on full .IF you are splitting the same prosecution will be done u/s 7A of EPF & misc. provision act.
thanks & regards,
From,
Sumit Kumar saxena,
9899669071
20th September 2011 From India, Ghaziabad
definition of wages in Minimum Wages Act & definition of wages in PF Act is different.... pl refer the recent judgement of SC ... Minimum wages can be split up for PF contribution,
20th September 2011 From India, Vadodara
Yes, See the recent judgment of Punjab and Haryana High Court, wherein the EPFO gone for appeal against the impugned order of the same court earlier on the decision of Single judge.

Two member judge passed an order the Minimum Wages Act, 1948 and EPF & MP Act, 1952 are two different Acts. One cannot interpret the Basic wagees as they feel like.

See the judgment of the P & H High Court.

However, there two other judgments (Madhya Pradesh High Court and Madras High Court) are against this concept. Means they have given judment in favour of EPFO i.e. to include all allowances in the basic and pay contribution. Against this order (Madras High Court), the employers have gone for appeal in High Court, and the hearing is posted on 26th or 29th (I do not remember correctly). We will come to know once this is heard.

Hitherto organizations (including ours) are practicing of splitting of Minimum Wages. We are continuing the same concept unless and until there comes clear cut ruling.

It is your wish whether you want to split Minimum Wages or otherwise.

Balaji
20th September 2011 From India, Madras

Attached Files
File Type: pdf P & H High court - July 2011.pdf (1.54 MB, 2374 views)
no MINIMUM WAGE CANT BE SPLIT AND DEDUCTION OF EPF IS DONE ON BASIC+DA/VDA+FOOD CONC.(IF ANY), IF MINIMUM WAGE IS THE COMPONENT OF THE SAME HOW IT CAN BE SPLIT, PLEASE FORWARD A COPY OF JUDGEMENT TO ME SO THAT WE CAN GO THROUGH IT.
THANKS & REGARDS,
FROM,
SUMIT KUMAR SAXENA,
9899669071
20th September 2011 From India, Ghaziabad
Mr. Sumit,
Assume Minimum Wages in a particular state is Rs.5500/- ( a hypothetical figure OK?). You (we) are splitting this as
Basic : 2000/-
HRA : 1500/-
Conv : 800/-
CCA : 1200/-
Total : 5500/- and paying PF contribution of Rs.240/- p.m.
1. As per Punjab and Haryana High Court, THERE IS NOTHING WRONG IN DOING IT as above. Please see my attachment now (previous judgment), and the recent judgment in my previous post.
2. Also see other judgements of Madhya Pradesh (attached now) and Madras High courts (this is voluminuous and will send later)
3. See the chrolonogical order
Punjab and Haryana High Court judgement - favouring employer - 01/02/2011
Madras High Court favouring EPFO - 07/06/2011
Madhya Pradesh High Court - favouring EPFO - 21/06/2011
Punjab and Haryana High Court - favouing employer - 20/07/2011
You wound understand there is a huge confusion in the orders itself. You go through the same and come back to me.
Balaji
20th September 2011 From India, Madras

Attached Files
File Type: pdf MP HC JUDGEMENT ON PF[1].pdf (1.71 MB, 1358 views)
File Type: pdf Punjab and haryna High court judgment.pdf (549.6 KB, 964 views)
Here is the Madras High court order favouring EPFO. Read all judgments Balaji
20th September 2011 From India, Madras

Attached Files
File Type: doc Madras High court judgement on PF contribtion.doc (95.5 KB, 891 views)
Dear All
Minimum wages cannot be split for PF contribution. PF calculation is done on minimum pages + basic salary. But there was recent proposal that all components of salary be included in calculation of contribution of PF.
Minimum wages after PF deduction if less then what ever is Minimum wages as per the notification of Government on Minimum wages rate,then such deduction shall stand null and void.
But if the minimum wages is higher than the notification issued by government on minimum rate of wages then the same shall not be null and void, and then such deduction shall be held correct and valid.
Kindly refer Minimum wages act for more details.
Regards
Octavious
20th September 2011 From India, Mumbai
Hi All
There is a lot of controversy on this subject and no body could found a definition on this. Any which way it can be interpreted. How ever in the recent notification from EPFO dated 23.05.2011 clearly says for the PF contribution, atleast to maintain the Minimum wages and that cannot be spited. i have enclosed the notification also for your reference.
But problem here is all the PF officials are going according to section 2(b) of the act. which says all allowance paid to be included for PF contribution. where as as per recent notification its only Minimum wages. but as per officials you have read both the sections together. ie, section 2(b) and 7
However as said lot of interpretations are happening and lot of the companies are getting affected and am also fighting with EPFO for the clarity as we got notice for not contributing conveyance allowance.
Regds
Pradeepan
20th September 2011 From India, Raipur

Attached Files
File Type: pdf PF - Circular - M W wages Act.pdf (684.1 KB, 1764 views)

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