PF & ESI Deduction On Minimum Wage

YES, structure you have made is all correct, permissible deduction of EPF, ESI ( emlye share only) are allowed under minimum wage Act and payment of wages Act.

PF & ESI deductions are authorized deductions under payment of wages Act. which is to be deducted from gross salary. Considering the provisions of Payment of wages Act there can be 50 % deductions from the wages. Such deductions must comply with the provisions of Payment of Wages Act. Hope this will satisfy you.
Avinash Kanoray

hi all,
this is praveen. Harshle what ever earnings that are geting to the employee is an income. but for P.F and ESI u need to take only their basic earnings not the bonus amount. Bonus is paying by company for goodwill not as an wage coponent.so u need deduct only on their basic amount what they are earning.

Dear Friend,
Basic Wages all always constructed by adding some amount to Min.wages. Hence you cant take the Min. wages as basic wages unless you add some amount to the same then only it could be called as Basic Wages.

Dear HR Friends and Bosses,

I have tangential view and I would like to hear from you your views on this matter.

The Minimum wage of any state is not the Package that we offer to our regular staff. This package is then tailored to meet the legal stipulations and comply with the statutory compulsions to ensure that law is met and yet the financial payout is kept to suit the budgetary constraints of the employer.

It is my opinion that the worker must get the declared minimum wage as in HAND salary. All the ESI & EPF should be calculated over and above the minimum wage for fixing his gross salary. Thus we ensure justice with benign hand and that also minimizes the market inflation at his level of pay.

This gives us a bit lesser business as Service Provider but it makes my worker loyal and dependable reducing the TURN OVER factor immensely. Even when he leaves me he is always looking forward to join the company again.

I welcome your views and criticism on my view and practice for the past 7 years of running my company. We pay the minimum wage to our worker in hand as his TAKE HOME salary and meet all the statutory payouts after that.

Regards, Vikramjit Singh

Wg.Cdr.(Retd)

Proprietor

Azaad Enterprises Services & Consultancy