Industrial Relations And Labour Laws
Hr Consultant

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Dear Sir, Kindly help me on below mentioned issue:-
"an employee his baisc is Rs. 70,000/- and his pf deducted on 70,000/- Now we want to reduce his basic i.e. 50,000/- and deduct his pf on 50,000/- is it possible."
Kindly refer the act with section.

From India, Lucknow
there is no bar for such restructure, however the gross salary can not be reduced under payment of wages act

There was a similar case on the same. At that time the statutory limit was Rs 6500/-
Case : Marathwada Gramin Bank
Here the employer was contributing EPF upon more than prescribed limit Rs 6500. Later on he wanted to limit it to the prescribed limit of Rs 6500/-. The Regional PF office and the Industrial Tribunal did not allow it so the employer filed a case.
The judge held that the employer is under the obligation to pay EPF in accordance with the obligations of EPF act. The bank cannot be completed to pay amount in excess of the same for all times.
Section 12 of the EPF act says that Employer not to reduce wages: But this case said that when an employer is deducting and depositing EPF more than prescribed salary he can reduce it to Rs 6500 / month and in the event Section 12 of the EPF will not be attracted.
The PF office later issued a notification on the same.

From India, Mumbai

Attached Files
File Type: pdf Case_Marathwada Bank.pdf (3.30 MB, 32 views)
File Type: pdf PF-Circular-Marathwada bank.pdf (27.6 KB, 52 views)

I would like to add to what Shweta Nair has said that EPF Organisation has no right to demand any contribution from the employer on a salary of more than Rs 15000 ( earlier it was Rs 6500 when the Maratwada verdict from the Apex Court came) and therefore, you can reduce PF qualifying salary but subject to a limit of Rs 15000. Any reduction in PF qualifying salary below Rs 15000 will attract section 12 of the EPF & MP Act and the EPFO can insist the employer to pay contribution on 15000.
Madhu T K

From India, Kannur
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