Understanding PF Calculation: What's the Minimum Basic Under the Minimum Wages Act?

Minimum Basic for PF Calculation

Please advise me on what the minimum basic should be for PF calculation as per the Minimum Wages Act, and which zone should be considered. We are licensed under the Shop Establishment Act.

Regards,
Hema R. Iyengar

Please advise me on what the minimum basic should be for PF calculation as per the Minimum Wages Act and which zone should be considered. We are licensed under the Shop Establishment Act.

Regards,
Hema R. Iyengar

As per minimum wages, it should be the same as minimum wages. However, for the purpose of PF, we can split the minimum wages as per the decision of the court in the case of G4S Security vs. RPF Gurgaon and also the decisions of some other courts.

Attribution: https://www.citehr.com/404423-minimu...#ixzz1t3N0vvkB

As you are registered under the Shops & Commercial Establishments Act, you should follow the minimum basic pay and DA as per the Shops and Commercial Act itself. Based on that, PF should be deducted. 

PF Officials and Minimum Wages Split-Up

PF officials are not accepting the split-up of minimum wages. A notification released on 23rd May 2011 in this connection is attached herewith for your reference.

Regards,
Sunjay2904

Yes, as rightly mentioned by Sunjay2904, the splitting of Minimum Wages is not permissible by EPFO. Please take note of this information.

As per minimum wages, it should be the same as the minimum wages, but for the purpose of PF, we can split the minimum wages at 95% of the rate. The remaining 5% can be deemed as HRA. Suppose the minimum wage for a particular state is Rs. 3600, then we can split it into Basic 3420 and HRA 180, i.e., 3420 for PF.

Regards.

Ms. Hema,

Minimum wages comprise of Basic (2250) + DA (925) + HRA (675 = 30% of basic) = Rs. 3850 (As per the Shops and Establishment Act of Tamil Nadu).

PF recovery to be made for Basic + DA = Rs. 3175/- since HRA is not included under the Basic wage definition under the Employees' Provident Fund scheme.

Regards,
Raju

In UP, the minimum wages effective from April 2012 for an unskilled worker are Rs 100 basic + Rs 74.14 DA = Rs 174.14 per day. This amounts to Rs 4,528 per month. Can I take Rs 2,800 Basic + Rs 1,750 Other Allowances = Rs 4,550 for an unskilled worker, as PF will be calculated on the Basic only?

Please comment and provide your valuable advice.

Regards,
Sarvesh