Understanding Minimum Wages and PF: Why You Shouldn't Split Basic and DA Contributions

Understanding Minimum Wages and PF Contribution

In short, this notification states that you shouldn't split Minimum Wages (Basic + DA) when calculating PF contributions. Basic wages or PF applicable wages must equal or exceed the minimum wages (Basic + DA).

Regards,
Parisa

It should be ensured that the Basic + DA for the PF department is not lower than the Minimum Wages relevant to that region. If the Basic + DA exceeds the Minimum Wages, then there is no issue.

Regards

Yeah, you are right. Once again, it depends upon management. Even if Basic + DA is above 6500, if management agrees, then the contribution shall be on the full basic.

Hey, do you agree that in the HR field, every concept depends on management? What is your opinion?

There is no definition in the PF Act, and as per the notification, the definition used for basic wages refers to the Oxford Dictionary. Therefore, it does not apply and can be challenged. Jeevarathnam, brother, HRD is not for this; rather, they are for policy-making with regard to management and labor. So, think higher.

Challenge to Minimum Wage Splitting for EPF

Finally, it has been challenged. The split of minimum wages with respect to EPF.

Regards,

Please find, in reference to the same, the decision from the High Court of Punjab and Haryana at Chandigarh.

Good to find the minimum wages split details. The copy can be used for contractors to inform them not to split the minimum wages to reduce the contributions from the employer's side. Since the recent judgment (Punjab & Haryana Judgment), the split has been kept in abeyance. Therefore, until the clearance of the judgment, we can use/apply the aforementioned judgment sent by you.

Thank you very much.

Regards,
P. K. Prasad