Can My Company Lower the Basic Salary for PF Contributions? Seeking HR Insights

I am working with a manufacturing company as an HR executive. I have a doubt regarding PF. Earlier, my company was deducting PF on the full basic, i.e., if an employee has a basic salary of 10,000, the employee's share was 12%, which is 1,200, and similarly, the employer's share was 1,200 (12%) along with additional admin charges. However, the company has now introduced a new policy stating that they will no longer contribute their share based on the full basic salary as they previously did; instead, they will only contribute based on a basic salary of 6,500.

My doubt is, can we reduce the basic salary amount from 10,000 to 6,500 for those employees who are already contributing based on a basic salary of 10,000?

Yes, it's right. There is no doubt an employer can reduce it, but not less than 780 if his earned basic pay + DA is more than 6500.

You should not reduce the basic salary; only the employer's contribution can be restricted to 780/-, i.e., 12% of 6500.