Korgaonkar K A
Adminstration Head
+2 Others

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Hi friends,
I have a doubt regarding Retaining allowance while computing PF contribution. For computing and as per PF Act Basic+DA+Retaining
allowance (if any) shall be calculated . And retaining allowance is paid when an employee is retained by the employer when the factory or establishment is not working.
1) Whether retaining allowance different from Over time.
2) Under what circumstance an employee retained by his/her employer to receive retaining allowance.
3) Is there any particular formula for the payment of retaining allowance.
4) Any factory/ establishment follow such allowance as on date.
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Dear Tapan ji,
Certainly retaining allowance is different from overtime. You have rightly said that retaining allowance is paid when an employee is retained by the employer when the factory or establishment is not working.
When EPF Act came in to force, that time In Kolkata & in some other part in our country there was a system of engaging seasonal labours in some industries in which the labours were getting employment gainfully for six-seven months in a year and remaining months unemployed. During unemployment, they use to get retaining allowance so that they are available to the employer in next season.
The retaining allowance is also paid in pursuance of the Report of the Second Central Industrial Wage Board on the Sugar Industry and subsequently in implementation of the Award of the Industrial Court.
Section 6 of the EPF Act mentions that contributions have to be deducted on retaining allowance.
Thanks Mr Korgoankar for the clarification on retaining allowance. It is understood in order to retain seasonal factory/establishment worker ( only) the employer pay retaining allowance to use their services as and when required.
However does retaining allowance variable or fixed payment.
Secondly for many reasons the factory or the establishment does not work. For example due to natural calamity, war,sabotage etc.Although factory or establishment is not seasonal in character but due to unforeseen factor the establishment not working.
Some establishment also use forced leave to retain its employees.
How to ensure whether employee retain in such conditions are eligible for retaining allowance.
1st of all thanks to Mr. Keshav sir for valuable inputs given by you regarding retaining allowance applicability on PF. PF applicable on Basic+Da+special allowance MH+any food concession +retaining allowance. If which state minimum wages non complied wages of employees so Pf applicable entire wages (total earning) except House rent allowance..
Anand Ingole
pl,guide about due date of retaining allowance..
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