Raj Kumar Hansdah
Shrm, Od, Hrd, Pms
Sr. Hr Manager
Mdm Engg.
+1 Other

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Dear Seniors,
I am working in a Granite export factory in bellary.
Can we change salary structure 01. by reducing basic + da
02. or without altering basic+da
which has been practicing since 10 years.
your advice and suggestions appreciated.

From India, Bellary
You can change the salary structure please keep in min if the Basic + DA is lesser than the existing rate then people may oppose the same & which will go against you ( if there is any future litigation ) take consent of employees in written before doing so.....
From India, Pune
Thank you Mr.Prashant for your suggestion.
My problem is my employer is facing a big problem in case of paying gratuity. because previous non professional staff in HR dept has shown total pay as the basic+da. now it will be very big problem for employer to pay the gratuity amount at higher side.
Ex: one of our skilled employee is having Basic-7000 DA 3500/- & total pay 10500 only. employer is paying PF contribution for ceiling amount Rs 780 (12% for 6500).
so can we reduce the basic and DA up to 6500 and show other 4000 in other heads.
Pls reply me sir.
with regards,

From India, Bellary
All emoluments as per terms of employment and conditions of service ,what ever be its names , including DA will be treated as wages for Gratuity.All other allowances ,bonus,commission,HRA,OT, will be excluded.
You can restructure your wages without resulting in reduction in contribution to PF ,ESI etc.
Varghese Mthew

From India, Thiruvananthapuram
Dear Alle,
you change the total salary structure, but the Basic + DA would be remain same or increase you can't decrease it, its against the Labour laws, you acan adjust gross salary in other component like HRA, Mediclaim, Transport allowance, Washing allowance, Children allowance, uniform allowance, other allowances etc. your Basic + DA would be the more than or equal to minimum wage of that state.
you can deduct Allowances and adjust it to basic + DA so that u can ful fill the criteria of minimum wage.

From India, Delhi
Do you have a union there? If yes, have you entered into a settlement with them? If yes, then it may be very difficult to reduce PFable salary i.e. Basic + DA. Further, is the DA Fixed or Variable ?
If u don't have a union settlement in place, than PFable salary can be reduced by keeping the total emoluments same, with a wrtten consent of employees, by keeping the Basic + FDA to Rs.6,500/- . There is a SC decision to that effect, as anyway PF is mandatory till 6,500/- only.

From India, Mumbai
Dear Mr. Dixon,
In case of PF once it is deducted on amount more that Rs 6500.00 then it is not permitted to reduce to the extent of Rs. 6500.00 unless the consent of all affecting employees & Concerned PF authorities.

From India, Pune
My dear Shanmukha
Its a case of management becoming wise and trying to reduce its statutory liabilities; resulting in a loss for the employees. We come across such cases everyday.
Do go through and consider the responses given earlier. It would not be proper to reduce the Basic pay and DA of employees.
What can be done without harming much the interest of employees; is to accordingly structure the salaries in case of next increment and promotions after the performance appraisals; without reducing the existing basic pay and DA.
Convince your management to wait and act accordingly so as not to demotivate employees.
Warm regards.

From India, Delhi
Dear Prashanth and Dear Dixon sir,
Many thanks for your prompt response.
Here we do not have any union in our company. we are following the minimum wage rule insisted by government of karnataka. we come under natural stone granite industry.
We are deducting Rs 780/- only towards PF for the employees whose PFable salary is even more than Rs 6500/-. and DA is variable in our company.
And now my doubt is can we go for reduce of the basic + da up to Rs 6500/- without disturbing their PF contribution and total net pay.
please advice me in this regard.
thanking you
Shanmukhappa Alle

From India, Bellary
Dear Alle.shanmukha
Are you waiting for a response that suits you and supports your company's intentions ??
No approval is required for doing anything which is unfair.
You have made your intentions very clear.
The earlier HR has rightly included Basic pay and D.A. in calculation of gratuity.
But you are calling it Unprofessional !!!
You want to please your employers by circumventing or breaking the law. For this you need support from CiteHR members !!
I must tell you that this forum does not support unethical actions nor advises or abets in such practices.
I shall be constrained to delete/remove any such contents.
Have a nice day.

From India, Delhi

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