Can We Deduct The ESI, PF & PT When An Employees Is Under Suspension - CiteHR
Bcarya
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Karthik Nayudu
Regional Manager - Hr
Badal Moharana
Envitonment/time Mgt./labour Law
Laxmikanth.hr
Sr Hr Executive
Srihari2720
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Eswararao Ivaturi
Ex-manager (pers&adma)
Kkanirudhan
Training & Placement Of Management Students
Prasannaprabhu28
Hr -executive
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Dear Seniors Need your guidance & Suggestion on below query. Can we deduct the ESI & PF when an employees is under suspension. With Regards Prasanna Kumar
Dear Mr.Prasanna Kumar,
i think Suspension and Termination are not the same. since the employee is under suspension the statutory dues like ESI, PF & PT will be deducted, but the calculation will be on 1/2 of his basic salary.
regards.

If subsistence allowance is paid to the suspended employee then the Statutory Payment like ESI, PF has to be contributed without fail. Suspension of an employee does not end the employer-employee relationship with his employer.
The Supreme Court has held that subsistence allowance forms the ‘wages’ of a suspended employee under the Employees State Insurance Act, and hence employer / employee contributions to the ESI fund must be made on the subsistence allowance. (ESIC v. Popular Automobiles, Civil Appeal No. 3850 of 1993, decided on 29.09.1997).
The Supreme Court has also compared Section 7A of the Provident Fund Act in India and Section 45A of ESI Act in Bharat Heavy Electricals Ltd v. Employee’s State Insurance Corporation (Civil Appeal No. 1271 of 2008, as decided on 14.02.2008) which gives power to inspectors under the respective statutes to initiate proceedings against employers for failure to pay contributions under the respective statutes.

prasanna kumar
hi
hear the question of suspension means he is punished for some reason . if he is proved that his suspension is wrong then the company will pay full payment and the PF and esI detected as usual .. but if his suspension is proved correct then he will be paid 50 % of the basic for his suspension period . . in that also the Pf and esi will be paid . when the esi and pf will be stopped the employee is on lop. or other reasons.
regds
srihari

Hello Sir,
Suppose person do the job in A company and left it after 9 months and join company B, But in company C person does not show company A experience he wants to show only company B experince then company A experince will be verified.
Thanks

Hellow, deduction of PF & ESI on the wages received by the employee during the suspension period is the statutory responsibility of the employer. Eswararao Ivaturi.
It is correct that subsistence allowance is wages for ESI.But for EPF it is not.See the definition of basic wages in EPF Act.It says the basic means the emoluments which are earned by an employee while on duty or on leave or on holidays ........When a person is under suspension he is not on duty,leave or holiday.Hence the payment he receives as subsistence allowance is not wages for PF.The referred case above is not under EPF Act, but under ESI Act.
VARGHESE MATHEW
HR/LABOUR LAW PROFESSIONAL
09961266966

Subsistance allowance is paid to the employee during the course of employment calculated at 50% of his wage, in my view deduction of PF on this amount cannot be avoided. Eswararao Ivaturi.
Dear Prasanna Prabhu,
I am totally agree with Mr. VARGHESE MATHEW.
Subsistence Allowance attracts ESI, not EPF.
Mr. Saji has shared an Judgement of The Hon'ble Supreme Court in this regard. But I would also like to share that it is clearly mentioned that "An inquiry under sub-section (1) of Section 7-A
can be initiated to decide the dispute regarding the applicability of the Act". But, thereafter no further update in this regard was issue by the EPFO.
So, till any notification from EPFO in this regard, It could not be assumed that Subsistence Allowance also attracts EPF, this is my view. The learned members can correct me, if there is any discrepancy.

Dear Prasanna
Its simple don't get confused, PF, ESIC & PT will be paid on earnings right?????? then if they have not earned then what will you pay.
In case if salary is on hold and the employee is terminated/suspended in that case you have to pay the contributions to the respective departments.
Best Wishes
Karthik


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