Suspension Dilemma: Do Companies Pay PF and Salary During Employee Suspensions?

When an employee is under suspension, will the company pay the PF contribution or not? What are the rules and regulations regarding suspension? Can a suspended employee receive their salary or not? Please provide the information.

Regards,
S. Srinivas

During the period of suspension, an employee is eligible to receive a subsistence allowance at the rate of 50% of the salary (basic + DA). Depending on state rules, the rate of subsistence allowance may vary. Initially, the rate is set at 50% for the first 90 days of suspension. If the suspension extends beyond 90 days, the subsistence wages increase to 75% for the remaining duration.

Approaches to Deducting PF from Subsistence Allowances

There are two approaches to deducting PF from the subsistence allowances. The first method is to deduct PF as if it were regular salary paid. The alternative is not to deduct it temporarily and instead collect it from the arrears of salary paid once the suspension is lifted, and the employee is reinstated.

Regards,
Madhu.T.K

Dear Shri Madhu. T. K, if the employer proves that the suspended employee is guilty of the charges leveled against him and then terminates him from employment, will the employer be required to pay any wages for the period of suspension of the employee? Please inform.

Regards,
Simhachalam

Payment and Reinstatement of Suspended Employees

If the suspended employee is discharged from service, no more payment is to be made apart from the subsistence pay already paid. On the other hand, if exonerated of charges, he should be reinstated, and full wages should be paid with retrospective effect from the date of suspension. While doing so, the subsistence allowance already paid shall be deducted from the wages payable.

Regards,
Madhu.T.K

Thank you. In fact, after posting this question, I found that you had already given similar clarification to one of our friends' questions.

Regards,
Simhachalam