Still the fingers are crossed. Letís watch the development. Perhaps some "via media" solution may emerge. The claim that the burden on employees will increase is not absolutely true. Since nowadays be it workmen or executives employer count burden of each rupee- direct or indirect as salary (CTC). All they may do is restructuring of wage/salary.
Of course from employee end itís a constraint, since each individual is unique and each ones' needs are different based on his age, phase of life and philosophy of Life. The person who is in need of money now will have to adjust with reduced take home.
Normally for executive cadre 40% of their CTC constitute of the Basic component. The present deduction of 24% (as employers' contribution is also accounted in CTC) ON 40% of CTC will shift to 24% of 100%.
Apart it may have Macro level impact on nationís economy as less amount of money will be transacted.
Letís monitor closely- and keep on sharing views.
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"The proposal to renotify definition of 'basic wages' under the Employees Provident Fund & Miscellaneous Provisions Act 1952, has huge financial implications both for industry and the government", the industry body said in a statement.
"The move is ill-conceived and if brought into force will dampen business and investment sentiments," it said.
"This may even be counterproductive to the Employees' Provident Fund Organisation (EPFO) as organisations who are extending coverage to employees receiving salaries above Rs 6,500 may choose to opt out, depriving employees coverage under a globally renowned social security scheme," Ficci said.
According to the provisions of EPF scheme 1952, every employer has to contribute 12 per cent of the basic pay and dearness allowance towards the PF deposits of workers every month. Thus with increase in basic wages, the employers' liability would increase.
Out of employers' 12 per cent contribution, 8.33 per cent is deposited into workers' Employees' Pension Scheme 1995 accounts.
Central Government also contributes 1.16 per cent of the basic wages of workers toward their pension account.
Therefore, the decision would also result in higher contribution by the central government towards workers' pension accounts.
At present, there are over 50 million subscribers of the scheme. EPFO has a corpus of over Rs 5 lakh crores in EPF and EPS schemes.
As per the notification issued by the EPFO on November 30 last year, all allowance which are 'Ordinarily, Necessarily and Uniformly' paid to workers were to be clubbed with basic wages for the purpose of PF deductions.
However, the notification was put on hold later on. EPFO had constituted a committee to deliberate on the issue. The panel had reportedly suggested to allow clubbing of wages with minor changes in the provisions to Labour Ministry.
The final decision to notify the clubbing of wages, has not taken so far by the ministry.
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I have confused this one employee left from 5 June in the previous company and exit is the same And he joined the new company on 3 June and the appointment letter is on the same date. Is there any problem in pf account .please advise me