Madhu.T.K
Industrial Relations And Labour Laws

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Dear All,
Please clear my query.High court gave judgement that all the component will be the part of the basis salary apart from HRA.We should follow the instruction or not because still we do not receive any legal notification regarding this from EPF department.Please suggest?

From India, Sirhind
When the Supreme Court has given a clarification as to what is Basic Wages, what legal notification is expected from the EPFO? Every employer is expected to pay the contribution at the prescribed rates on the BASIC WAGES and Dearness Allowances. The Basic Wages itself is the total salary paid to an employee. that means it is the total salary that is to be considered for PF and not the basic salary that you fix. Even the HRA is a part of salary for many private sector companies. It can be excluded only if HRA is paid only to those who reside in rented accommodation and the rent of which is paid by the employer.
Very simple, if an employee takes a few days' leave without pay, will you pay the allowances in full and deduct the salary only from the basic salary? You will deduct the salary from the total salary including all allowances. Why? because this is the salary agreed with the employee. If so,this is the basic salary for PF deduction also.

From India, Kannur
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