PF inspectors are insisting, only in following cases.
Ex. Basic 4500 + HRA 1000 = i.e. monthly salary for 8 hours is 5500, but contract labours are working 12 hours a day hence actual earning is 5500 + 4500 OT (i.e. every day 4 hours working based on this double salary of basic come to 4500) (Where number of OT hours is not the jurisdiction area of PF Enforcement officer, hence he can suggest you to correct)
Basic is 4400 and other allowance is 12000 = Total salary 16500, hence also PF enforcement officer suggest to correct the distribution. i.e. increase basic upto 6500.
There is no mention in law about Basic v/s other allowance, even though if PF enforcement officer finds that we are trying to keep minimum basic to avoid PF then he may suggest for changes in structure. Law is silent on Basic v/s other allowance.
BrainLight HR Solutions
20th October 2012 From India, Mumbai
Please refer section 2(b)(ii) of EPF&MP Act. As per the said section overtime wages are not considered for calculating PF.
But when it comes to ESI Act, refer section 2(22). Here wages includes total remuneration.
So, don't confuse with the Acts.
Overtime Wages are not considered for PF calculation.
20th October 2012 From India, Hyderabad