Compensation Structure [Thread 353186]

Is it mandatory to give HRA & Conv.,from the compliaces point of view?

Dear Arpit
It is not mandatory to give HRA & Conv. for the compliance point of new, but the consolidated wages should be atleast minimum wages.

Dear Mukesh,
As per EPF Rule, can we bifurcate the minimum wage into Basic, HRA, Conv etc. Please advise with case history.
Regards
Harkishan Tanwer
Manager-HR & ADM
09873141542

Dear Harkishan
As per the provisions of Employees' Provident Funds & Miscellenaous Provisions Act, 1952, the management can bifurcate the minimum wages into Basic, HRA, Conv. only, no other head is allowed. Further, if we have not birfucated the minimum wages of some employees/ worker and the management has paid consolidated, then the management cannot birfucated the same, but the management can birfucated the minimum wages for the employee who will join in future.

Dear Sir,
it is not mandatory for the compliance point of view, but may be for income tax benefit point of view.
Anil Sharma

Dear Mr. Azad,
plz can u tell us the criteria of bifurcation of Minimum wages into basic, HRA, Conv.(%age of Basic, HRA and Conv. Allowance.) if the minimum wages is 3850/-.
Manish Sharma

In Maharashra an establishment employing more than 50 employees has to pay minimum 5% as HRA of Basic + DA

Dear Mukesh,
hope you are right at your stand as you are a advocate & managemnet consultant as you had shown in your sign.
but i would like to inform you that it's already declared that bifurcation of minimum wage is not allowed in any other head except DA. Basic + DA should be minimum wage and minimum wage should be as per employee category(Un skilled, semi skilled -A,sem skilled-b,skilled-A,skilled-B,higher skilled-A,higher skilled-B etc) as per their work responsibility and qualification.
this deceision is givin in the M/S JMA industries Ltd. FBD, Haryana
so pls look in to this matter and give us your valuable feedback
thanks
Neeraj

Dear Neeraj
I want to clarify the situation before we are advising that the management cannot birfurcate the minimum wages according to the judgement passed by the Hon'ble Employees' Provident Fund Appellate Tribunal, New Delhi in the matter titled as M/S JMA industries Ltd. FBD, Haryana. But, the month of February, 2011 Hon'ble Punjab & Haryana High Court has given a clear judgement on this point and it has been decided that the management can birfurcate the minimum wages of an employee and in view of the judgement the management can birfurcate the minimum wages. So, you are advised to birfurcate the minimum wages till no other judgment / decision is passed by Hon'ble Punjab & Haryana High Court and / or Hon'ble Supreme Court of India on this point.

Dear Manish
The minimum wages is in punjab is Rs. 3850/-, then you have keep the
Basic Rs. 2700/-
HRA Rs. 850/- (the HRA should be approximately 25% to 40% of basic salary)
Conv. Rs. 300/- (the Conv. should be approximately 10% to 20% of basic salary)
Nothing is specify the percentage of birfurcation of minimum wages in any rule. But we have to decide the same according to the parameter mentioned in the Income Tax Rules.