Industrial Relations And Labour Laws
Sr. Hr Executive
Srinath Sai Ram
As rightly commented by Mohan Kumar, PF will be deducted only on basic. But, Basic should be minimum Basic+DA prescribed under state minimum wages Act.
22nd July 2017
22nd July 2017 From India, New Delhi
Please note that Employee share of EPF Contribution @12%
EPF Wages means:Basic, DA & VDA.EPF Contribution is payable on EPF Wages only & not on other components.Please update your knowledge in statutory matters before commenting.For your kind information i am qualified & experienced HR Professional with proven track record
2nd September 2017 From India, New Delhi
Now coming back to the discussion, I would say that the EPFO authorities cannot demand that the employer should pay contribution on the entire Delhi Minimum wages just because the notional wages amount if calculated for a monthly basis would be more than Rs 15000. That is Rs 622 for 26 days would be Rs 16172 and no way the EPFO can demand contribution on Rs 16172 though they can demand it on Rs 15000 in respect of an existing member. In respect of a new worker the EPFO cannot even demand any contribution because he can be an excluded employee since his wages at the time of joining the establishment is more than Rs 15000. As such the question of payment of contribution on Rs 900 per day will not arise.
Regarding "other allowances" in the salary break up, I would also say that this is going to be a heavy risk for the employer because any allowance which is paid to all employee in general will be taken as part of statutory wages for all purposes including calculation of gratuity. For deciding the PF qualifying salary also any amount which is required to make the salary equal to Rs 15000 can be taken from "other allowances" as the other component, ie, HRA, is not part of basic wages as per definition of wages under EPF&MP Act
8th September 2017 From India, Kannur