Understanding Minimum PF Requirements in Punjab and Haryana: Am I Complying with the Law?

Hi All,

I need a small help. I got to know from the website and HR department that minimum wages for Punjab and Haryana have been revised for unskilled workers. I want to know if there are any rules for the minimum PF to be paid. For example, my basic pay is set at 1400, and I am paying Rs 168 (12% of basic). Is this in accordance with the law or a problem? In total, I am paying him 3594 rupees per month.

Please help; this query is specifically for Punjab. If there are minimum PF requirements for Haryana, please mention them.

Thank you very much; I will wait for a correct reply.

Dear Rohit,

As per my knowledge, the PF should not be less than 12% of the minimum wages decided by the government. Therefore, the minimum wage determines the minimum PF amount.

Regards,
Naveen

The minimum wage specified by Punjab is Rs 3594 for unskilled labor. Does that mean that I have to pay Rs 431.28 (12%)? Is it required that the minimum wage specified must be the basic salary, or can we bifurcate the specified minimum wage ourselves?

Please reply.

Dear Rohit,

In Himachal, we can only change 5% of the minimum wage, which means that 95% of the minimum wage has to be kept as basic. Please confirm if the same applies in Punjab & Haryana.

Regards,
Naveen

Dear Rhoit/Naveen,

It is not like that and there is no relaxation of 5%. You have to pay PF on minimum wages. After the decision in the Group Four Security case, the PF department has issued a circular that there should not be a bifurcation of minimum wages, and PF should be paid on the minimum wages of the state. So, you have to pay 12% of the minimum wages of the state.

Thanks,
J. S. Malik

PF contribution is 12% of the basic salary, and the minimum basic wage is decided by the Labor Department. There is no relaxation on the minimum basic wage, as Mr. Malik said.

I am enclosing herewith the notification of the revised minimum basic wage of Haryana w.e.f. 1st April 2009 for your reference.

Regards,

Pankaj Chandan

Dear Naveen,

Kindly check for the circular issued by RPFC, Faridabad, Ref. No. PA/RC(II)/Misc./05/6856 dated 04.01.2006 for the mentioned changes regarding the deduction of EPF on Minimum Wages in Haryana.

Thanks,
Mikky Vij

Dear,

Please find attached the letter from the Regional Office in Gurgaon.

Thank you.

J. S. Malik

Thank you, Mr. Malik,

The notification is for Haryana, but I am talking about the relaxation of 5% in Himachal Pradesh. There is a relaxation of 5% to bifurcate the minimum wage.

Regards,
Naveen

But sir, you have provided the minimum wages. I want to know if there is a rule that we have to put 12% of the minimum wage as PF. For Punjab, as per government minimum wage is 3594 for unskilled workers, and my minimum wage can be Basic + DA + HRA. However, PF is to be calculated on Basic only. So, is it okay if my PF is based on 1400 rupees, which is the Basic in that minimum wage of 3594? I hope you understand my question.

So far as the EPF is concerned, the contribution by both the employer and employee is based on the minimum wages. The minimum wages include basic pay + dearness allowance. This can be a single component or in two components (i.e., minimum basic + DA at the rate prescribed by the Labour Department of the State Government). This is the correct position.

S. Krishnamoorthy

Can somebody provide the copy of the case, J.M.A. Industries Ltd. vs R.P.F. Commissioner, Faridabad regarding deduction of PF on minimum wages amount.

Malik sir,

I have the same query. If we are paying the gross wages more than the minimum wages and we are deducting the EPF on a lower amount than the minimum wages. One of my lawyers advised me, it is okay because we are paying more than the minimum wages. However, after observing the Group Four circular, I felt it was wrong. Is it okay? Please advise.

Regards,
VP

[QUOTE=vikramlamhe;689446]CAN SOMEBODY PROVIDE THE COPY OF THE CASE, J.M.A. Industries Ltd. V/s R.P.F. Commissioner, Faridabad REGARDING DEDUCTION OF PF ON MINIMUM WAGES AMOUNT.

Dear,

You can have the copy of the JMA Ltd. case at the following link: https://www.citehr.com/32490-bifurca...mum-wages.html

Regards

Can anybody provide me with any decision references from a high court or a supreme court? The internal guidelines of the PFD department do not hold the force of law. There is no specific reference to the payment of PF on minimum wages in the PF Act. An internal guideline by a CPFO or a High Court judgment (enforceable only in that state) or a Supreme Court judgment will be applicable to the Union of India. Can somebody share a copy of the Group 4 judgment and its current status? Is the matter in the Supreme Court, or has there been a judgment from the Supreme Court on this? All PF inspectors claim that there is an internal guideline to pay PF on minimum wages, but no one has shown me any guidelines. Can anybody help with the present status – internal guidelines by CPFO or a court judgment on this?

As in Himachal, we can change only 5% of the minimum wage, it means 95% of the minimum wage has to be kept as basic. Please confirm the same in Punjab & Haryana.

Regs, Naveen

Mr. Naveen, can you please attach the relevant circular of the PF department in this regard, since they are the competent authority.

Narayanan

Mr. Naveen, could you please attach the relevant circular of the PF department in this regard, as they are the competent authority...

Narayanan

Dear Narayanan,

Could you please forward me the details of the notification of the H.P. Govt. allowing a 5% change in the minimum wages fixed?

Further, I have gone through the matter in Punjab and have seen that there is no such provision in the notifications issued by the Punjab Govt on minimum wages. The notifications are silent on whether 5% or the whole of the minimum wages can be structured in such a way that the employee's take-home salary is never less than the prescribed minimum.

I can inform you that the Hon'ble High Court of Punjab and Haryana has admitted the writ filed by an employer and has stayed the operation of the impugned order passed by the labor authorities who were demanding the difference in minimum wages, where the basic wage was less than the MW, but the take-home pay was more than the MW fixed.

Furthermore, I have also come across the verdict of the EPF Appellate Tribunal setting aside the order of the 7-A authority demanding PF on minimum wages rather than on the basic wages. I am attaching the extract of the journal from the 2009 LLR 233.

Regards

Dear All,

Please find the attached file containing clarification of bifurcation by the Labour Office to EPF Office in Himachal.

Regards,
Naveen