Dear all, Section 12 of the Employees PF Act 1952 makes it specific that an employer cannot reduce the wages of any employee to meet the liability for employer contribution. Hence if the deduction of employer contribution is made from gross salary then it is patently illegal and the employer could be even prosecuted for this. Since it is an isolated case of such deduction being carried out only from new entrants it would be appropriate to bring the aforesaid provision of the PF Act to the authorities concerned. But if the organisation still persists with the wrong practice, it is necessary to bring this to the knowledge of local PF Inspector. As regards the point raised by Shri Mahendra, the CTC is a aggregation of the entire cost incured by the employer, it includes all perks and even the per capita cost of facilities like company transport, canteen subsidy, LTC etc. There is no legal provision regarding the same.KK