Compensatory Off in Maharashtra: Should PF Be Deducted? Seeking Insights from HR Peers

A.B.Kulkarni
Compensatory Off Policy and PF Deduction

I am working in a manufacturing company in Maharashtra. We have introduced a compensatory off policy recently. I want to know if PF should be deducted from compensatory off.

Thanks in advance.

Regards,
Ankur
Ashoknegidi
Hi, you need to deduct the PF amount because you are paying a salary for compensatory off (comp-off), and it's not a loss of pay (LOP).
Harshil Patel
Compensatory Leave and Provident Fund Deductions

Compensatory leave is a type of paid time off. Provident Fund (PF) deductions are applicable to all types of paid leave, including compensatory leave, as this leave does not equate to a loss of pay.

Regards
samvedan
The answers above are correct, and I agree with them! But I want you to understand the fact and logic of "Comp Off" in any industry!

An employee gets a compensatory off either for having worked on a paid holiday or on a weekly off (both are paid days!). He does this for the company and sacrifices a paid day of no work by working. The organization is therefore compensating such an employee by granting him a "Comp Off" on any other suitable day when he could be spared from work! When this happens, he has to be paid wages for such a day anyway.

When an employee is paid "salary" for any day, all statutory deductions will apply!

Last but not least, at least in a factory situation, anyone who works for more than 48 hours in a week has to be paid OT at double the ordinary rate of wages, UNLESS such an employee has been declared as exempted under relevant provisions of the act! Most companies do NOT pay OT to certain categories on the excuse that such an employee belongs to the so-called "management cadre" without checking out and/or conforming to the relevant provisions under the act. But that is another issue.

I trust you have your question answered now!

Regards,
Samvedan

December 5, 2012
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