Korgaonkar K A
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Srinath Sai Ram
Hr Manager
+2 Others

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Sir, I want to confirm about minimum wages bifurcation for pf contribution. is there any order to bifurcate the Minimum wages as current minimum wages is Rs.- 13350/- Thanks, Tanya Chauhan
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If you are paying just Minimum wages,you are not entitled to split the same in to other components just to reduce PF Contribution
Dear SRINATH SAI RAM ji,
While appreciating your answer in this thread I would like to draw your kind attention to your answer in some other thread in which you advised the queriest to go ahead with splitting of wages with basic component between 4000 to 5500 as against gross more than Rs. 25000. This basic component is much below the minimum wage rate.
Your answer in this thread is, if you are paying just minimum wage then you can not split the wages in various components. Does it mean that if you are paying above minimum wage (eg. above 25000) then you can split the wages in whatever way you want?
I am totally confused with your answers and therefore I raised the query here.
The other thread link is given as under for your quick reference.
https://www.citehr.com/583021-labour...elp-me-pf.html
what is the latest minimum bonus to be paid to the contract labours
Dear Korgaonkar Sir,
Please peruse the relevant thread wherein relevant Judgement has been uploaded for your perusal.
Where ever Employers are paying Minimum wages (Comprising of Basic Salary+Cost of Living Allowance i.e DA/VDA) Employer has to take the same as EPF Wages & PF Contributions to be paid accordingly.Employer can not split Minimum Wages in to various other Allowances to Subterfuge PF Contributions.
With regard to Establishments paying Salary according to industry Standards/More than Minimum wages,Employer has right to Form Salary structure comprising of various Allowances.Such Salary Structure has to be realistic & not to Subterfuge PF Contributions. Besides, there is ceiling of Rs15,000/- under EPF as on date. EPF is a beneficial legislation, both Employer & Employees should follow the same in letter & Spirit.Some of the establishments are restricting EPF Contributions to Rs15,000/- in line with wage ceiling.Hope this clarification will suffice your query
Dear SRINATH SAI RAM ji,

Now a days I constrain myself from participating such kind of open forum in which any one has a right to post anything as per his knowledge or perception.

You at one place are saying that Salary Structure has to be realistic & not to Subterfuge PF Contributions and at one place advising queriest to go ahead with PF deduction on 3000 / 4000 as against gross 21000. Therefore, I could not control myself from posting here.

I also had similar issue three or four days before this particular thread posting by the queriest. The learned HR guy with decorated designation there made arguments with me giving Google support including CiteHR. He also produced before me some salary slips showing PF deduction on 3000 / 4000 as against gross more then 10000/-.

And incidentally today only I came to know that the learned HR guy had gone ahead with PF contribution on 3000 - 4000 through someone else keeping me aside.

After reading all the posts by you in this regards as well on the basis of an experience with me as narrated here, I started feeling that I am wrong somewhere.
Dear Mr. Srinath Ram,

Please note that, PF contribution as per law i.e. on THE BASIS OF basic wages, dearness allowances and retaining allowances.

In case in hand, controversy is with regard to basic wages. ‘Basic Wages' has also been defined in

Section 2(b) of the Act which is reproduced here:‐

Section 2(b) “ basic wages” means all emoluments which are earned by an employer while on duty [on

leave or on holidays with wages in either case] in accordance with the terms of the contract of

employment and which are paid or payable in cash to him, but does not include:‐

(i) the cash value of any food concession;

(ii) any dearness allowances (that is to say, all cash payment by whatever name called paid to

an employee on account of a risen the cost of living) house rent allowance, overtime

allowance, bonus commission or any other similar allowance payable to the employee in

respect of his employment or of work done in such employment;

(iii) any present made by the employer;

14. Section 2(b) of the Act does not prescribe how much amount shall be considered as basic wages. So now

this is to be seen by this Tribunal whether respondent is empowered to direct the appellant establishment

to pay minimum wages to employees. During course of argument, no provision of the Act cited by counsel

for respondent which could reveal that ‘Commissioner' is empowered to direct the employer to pay minimum wages to the employee.

15. Bifurcation of wages below minimum wages or basic wages and DA etc. are the issue, completely out

of the purview of PF Authorities. PF authorities have no jurisdiction to ensure the compliance of Minimum

Wages Act or to issue any direction in this regard. Wages are to be determined is a decision between

employee and employer and further authority appointed under the Minimum Wages Act is only empowered

to raise issue regarding Minimum Wages, to be given to the employee.

16. Being quasi judicial authority respondent has statutory power to direct the appellant establishment to

deduct PF contribution on the basis of Section 6 of the Act only.

Regard,

Anand Ingole
On this issue as per labor law report judgement reserved before supreme court.
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