Reduction In Basic Pay...

Hello All... can we reduce the basic pay of an employee mid-way during the year?
If yes, how.. as in the formalities to be conducted?
If NO
1. Under which act, section, clause of the act...
2. How does it impact the individual, company, statutory compliances
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Thanks & Cheers
K

dear
you can not reduced some one basic not mid way or end way.it is not given in any act.
but u can co relate with PF act as it is mentioned in PF act that u can not reduce PF contribution of any person and if u will reduce basic than PF contribution will
also reduce.
ethically also we have never heard that any organisation reduced basic.
tks
j s malik

dear pls refer section 12 of the P F act.
karnatka high cout has given judgement in RPFC Banglore vsHarihar polyfibres in 1991
AN EMPLOYER CAN NOT REDUCE WAGES OF THE EMPLOYEEFOR THE PURPOSE OF PAYMENT OF CONTRIBUTION UNDER THE ACT.
tks
j s malik

as others have rightly mentioned, ensure not to alter any of the salary components which has a direct impact on the statutory contributions.
particularly, PF is one such compenent that s always under guard for labor dept.
also there is nothing like the changes have cannot be done in the mid of the year. usually people implement new things in the begining of the year to ensure that tracking and documentaion is kept simple at the time of filing.

Hi,

Basic pay once paid cannot be reduced as most of the perks & benefits/allowances are paid on the basis of basic pay viz. PF, ESI, LTC, medical reim., gratuity etc.
rgds,
Jyoti Negi

Dear,
Basic pay can not be reduced, it will be a voilation of sec. 12 of EPF & MP Act - 1952.
It will impact an individual that on reduction in his basic pay , other perks and allownces will be reduced if linked with basic. similarly on reducing basic pay PF contribution will be reduced EL Encashment, Gratuity, etc. are also reduced.
It is not seen that a company reduced the basic pay rather hold increment.
Thanks
Mohd. Arif Khan

Dear All,
Reduction of Basic pay is possible as a measure of disciplinary action against an employee, provided a provision to this effect is there in service rules by which the employee is governed. In other words, this will be like a penalty which can be inflicted after giving him adequeate opportunity of defending him or her and following the procedure for imposing such a penalty. But, I am not sure, in Private Sector this procedure of giving adequeate opportunity of defence is being followed or not. However, arbitrary action of such kind may invite legal implications.

regards
Deepak Mathur

DEAR ALL,
i am working in a private Diagnostic centre, As a nurse Reduction of bacic pay is possible of yearly increament time, bcz i am worried of my Pf eveything depends up on basic. so please help me out.

Strategically, logically & legally no. You can not reduce the Basic because all the payments are connected to basic. You can only do that at the time of increment you can reduce the basic wage and add the amount in allowances. The Govt of India is planning to fix the basic wage for all the positions @ 70%, not yet finalized & no GO / Gazette publication released.
This is part of addressing all the issues related to split in minmum wages & as well as in bringing a commonality across.