The government is planning to introduce new rule that is employee and employer will contribute EPF on gross salary at present it is made on basic, DA and food concession. The government may be planning with a noble intention but I have a question?
As per my understanding this will have an huge financial impact on entire economy as company net profit will slow down, employee with a lower net take home pay, government will have burden of paying interest and may even be counterproductive to the EPFO.
Employer Part:
They may think of changing the pay structure and capacity to minimize the employee cost.
They may choose to opt out to employees receiving salaries above Rs.6,500.
Small organization may not enroll their employee name rather may make cash payment.
Employee Part:
Employee net salary will be reduced and may affect their family budget especially who are paid Minimum Wages.
On the other part, employees saving will be more and will be beneficial in future. The amount will be multiplying and will receive a handsome amount during retirement or withdrawal. I will personally prefer this part as my saving will be more.
This may be a challenge for HR to convince employee (Lower salary) as they don’t have any option without opting. We need to highlight the benefit part to them and show a dream of secure future.
I need to have your views and opinion for the same.
Regards,
Shaikh Abedeen
Human Resources Professional
As per my understanding this will have an huge financial impact on entire economy as company net profit will slow down, employee with a lower net take home pay, government will have burden of paying interest and may even be counterproductive to the EPFO.
Employer Part:
They may think of changing the pay structure and capacity to minimize the employee cost.
They may choose to opt out to employees receiving salaries above Rs.6,500.
Small organization may not enroll their employee name rather may make cash payment.
Employee Part:
Employee net salary will be reduced and may affect their family budget especially who are paid Minimum Wages.
On the other part, employees saving will be more and will be beneficial in future. The amount will be multiplying and will receive a handsome amount during retirement or withdrawal. I will personally prefer this part as my saving will be more.
This may be a challenge for HR to convince employee (Lower salary) as they don’t have any option without opting. We need to highlight the benefit part to them and show a dream of secure future.
I need to have your views and opinion for the same.
Regards,
Shaikh Abedeen
Human Resources Professional