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.
14th May 2017 From India, Mumbai
#Anonymouswhat is the latest minimum bonus to be paid to the contract labours
16th May 2017 From India, undefined
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
17th May 2017 From India, New Delhi
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.
18th May 2017 From India, Mumbai
#AnonymousDear 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.
19th May 2017 From India, Mumbai