Dear members,
This query is related to basic component in the CTC structure. Recently as per PF commissioner guidelines from Mumbai our company has made it mandatory for all employees to be covered under PF. Earlier company has increased basic of employees who were not willing to be part of PF. Their basic was kept as INR 15100/- or more. This basic was same for the last 2 year. But recently when company was instructed to cover all employees under PF they reduced basic of all employees to 30% of CTC or minimum wages as Basic. Now our basic salary is reduced to around Rs 9000/- per month though our CTC has remained same. In our CTC structure gratuity and bonus is shown as part of CTC and calculated on basis on Basic salary. This has resulted in decrease in amount of gratuity of employees who have completed 5 years or more.
Is it legal to reduce Basic salary during course of employment ?

From India, Madras

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