Navigating Salary Structure: Can We Adjust Basic Pay and Handle PF Changes?

Hello Friends,

My name is Iqbal, and I need some help regarding salary structuring. The local government clerical pay scale is Basic 3290 + DA 145. My first question is, can we give a higher basic (e.g., 4000) and keep the DA the same (145)? Secondly, as per statutory regulations, PF is not mandatory if basic+DA is more than 6500. What if the employee was covered under PF as his salary was below 6500 and after salary increments, his basic+DA has become 7500.

Warm Regards,
Iqbal Siddiqui
+91-98395-07598

It's not like that once we have started deducting the provident fund of an employee, we cannot stop it from deducting. But one thing you can do is to deduct his PF on Rs 6500 only, and you can keep the DA the same and increase the basic salary.

Regards,
Chandrakant V.
Consultant - PF, ESI, Contract Labour & Other labor laws

Thank you, Mr. Chandrakant, for this information. My next question is about sick leave policy. What are the prevalent practices for very long sick leaves (few months)? Do we need to pay out the full monthly salary or part salary?

Warm Regards,
Iqbal