Is Splitting Minimum Wage into Basic and HRA Violating EPF Rules? Seeking Advice

Hello All,

As per my knowledge, PF has been deducted on Basic wage + DA. If in case the minimum wage is bifurcated into two parts, i.e., Basic wages + HRA, e.g., Minimum wage in our state is Rs. 3000/- per month. We bifurcated it into Basic wages Rs. 2000/- + HRA Rs. 1000/-. Will it be a violation of the minimum wage?

Furthermore, we deduct PF on Rs. 2000 only. Will it violate the regulations of the EPF Act?

Your valuable guidelines will certainly enrich our knowledge.

Best Regards,
GV

Dear,

If you are receiving a minimum wage of 3000 and dividing it into 2000 and 1000 as you have mentioned, there is no violation of the minimum wage act. However, if you are deducting PF on the 2000, then it is a violation of PF regulations, as it should be based on the minimum wage.

J.S. Malik

Thanks, Mr. Malik.

We need a citation, circular, or notification as a backup for our reference regarding PF deduction on minimum wage. Please help us out.

BR//GV

Thank you, Mr. Malik.

We need a citation, circular, notification, or backup for our ready reference regarding PF deductions on minimum wage. Please help us out...

BR//GV

Dear,

Different RPFCs have given notifications in this regard, and you can obtain it from your PF office.

Thanks,
JS Malik

Hi Verma_gk,

As per my knowledge, PF is deducted on basic and DA only, not on your minimum or maximum salary.

Dear MalikJI,

I need a small clarification. In our company, we are deducting PF only on the basic, and we are not including HRA or other allowances for deducting the PF. Actually, our company is located in Bangalore. Moreover, in our company, Basic + DA is more than the minimum wage as per the Karnataka Shops and Commercial Establishments Act.

Please revert to my questions.

Regards,
Jeevarathnam P