Kindly clarify the following doubt for my Professional guidance please.
Our Company is in Telangana State and we have two set of Employees viz.1.Conpany Employees and 2. Contract Workmen engaged through Licenced Contractors.
While the Company Employees are being paid the Salary on Cost to Company (C to C) pattern and PF inrespect of Company Employees is being paid on the Basic (as there was no DA component exists for Company Employees) which is equivalent to 50% of Gross Salary and treating the remaining 50% of Gross salalry as Allowances bifurcating as HRA, Conveyance, Medical, LTA, Education Allowance, Washing Allowance and Other Allowance, the Contract Workmen are being paid as per the Minimum Wages declared by Telanagna State Government for Unskilled, Semi Skilled and Skilled Category based on the GO applicable for Scheduled Employements, from time to time, copy of the latest GO issued by Telangana Government is in the attachment for your kind perusal and reference please.
Sir, in Telangana State Minimum Wages comprises of Basic Wage(fixed one) and VDA and accordingly we are paying PF inrespect of Contract Workmen on 50% of the total Minimum Wage on par with Company Employees and accordingly while preparing monthly wage bill the Contractor is showing 50% monthly earned total Minimum wage as PF Wage and the remaining 50% of earned Wage as other allowances, without any bifurcation/breakup.
For example: If the Minimum Wage inrespect of Contract Helpers (at Sl.No.10 in the attachment) is Rs. 8244.10 per month ie., (Basic Wage = Rs. 3496/- and VDA = Rs. 4748.10) we are paying 12% PF on Rs. 4122.05ps.being 50% of Total Minimum Wage as against actual Basic of Rs. 3496/-. It means we are paying PF on more than Rs.626/- of Basic Wage ( ie., 50% of Total Minimum Wage (Minus) Basic Wage).
Would like to have your expert opinion for the following taking into consideration of Sec.2(b) and Section 6 of EPF Act 1952:
Pl.confirm whether PF inrespect of our Contract Workmen is to be deducted based on Basic Wage or based on 50 % of Total Minimum Wage(as being followed right now in our Company) or based on 100% of Total Minimum Wage which include Basic Wage + VDA.
In our Company while there is no DA component inrespect of Company Employees in the bifurcation of total C to C, there is a VDA component in respect of the Total Minimum Wages being paid to Contract Workmen.
While as per Sec. 2(b) of the EPF Act 1952 Basic Wage does not include any Dearness allowance but as per Section 6 of EPF Act "The Contribution which shall be paid by the Employer to the Fund shall be (10%), of the Basic Wages, (Dearness allowance and retaining allowance (if any) for the time being payable to each of the employees.... ... ... ..... There is little bit ambiguity whether PF is to be paid only on Basic wage(on par with company regular employees or on 50% of the total Minimum Wage as at present for the Contract Workmen or on 100% of Basic wage + VDA ie; total Minimum wage.
Also pl.quote relevant settled citations, if any on this for my professional guidance pl.
Thanks,
LV Sastry
Mobile: 09866077163.
Mail ID: [Login to view].
Date : 24.01.2017.
Our Company is in Telangana State and we have two set of Employees viz.1.Conpany Employees and 2. Contract Workmen engaged through Licenced Contractors.
While the Company Employees are being paid the Salary on Cost to Company (C to C) pattern and PF inrespect of Company Employees is being paid on the Basic (as there was no DA component exists for Company Employees) which is equivalent to 50% of Gross Salary and treating the remaining 50% of Gross salalry as Allowances bifurcating as HRA, Conveyance, Medical, LTA, Education Allowance, Washing Allowance and Other Allowance, the Contract Workmen are being paid as per the Minimum Wages declared by Telanagna State Government for Unskilled, Semi Skilled and Skilled Category based on the GO applicable for Scheduled Employements, from time to time, copy of the latest GO issued by Telangana Government is in the attachment for your kind perusal and reference please.
Sir, in Telangana State Minimum Wages comprises of Basic Wage(fixed one) and VDA and accordingly we are paying PF inrespect of Contract Workmen on 50% of the total Minimum Wage on par with Company Employees and accordingly while preparing monthly wage bill the Contractor is showing 50% monthly earned total Minimum wage as PF Wage and the remaining 50% of earned Wage as other allowances, without any bifurcation/breakup.
For example: If the Minimum Wage inrespect of Contract Helpers (at Sl.No.10 in the attachment) is Rs. 8244.10 per month ie., (Basic Wage = Rs. 3496/- and VDA = Rs. 4748.10) we are paying 12% PF on Rs. 4122.05ps.being 50% of Total Minimum Wage as against actual Basic of Rs. 3496/-. It means we are paying PF on more than Rs.626/- of Basic Wage ( ie., 50% of Total Minimum Wage (Minus) Basic Wage).
Would like to have your expert opinion for the following taking into consideration of Sec.2(b) and Section 6 of EPF Act 1952:
Pl.confirm whether PF inrespect of our Contract Workmen is to be deducted based on Basic Wage or based on 50 % of Total Minimum Wage(as being followed right now in our Company) or based on 100% of Total Minimum Wage which include Basic Wage + VDA.
In our Company while there is no DA component inrespect of Company Employees in the bifurcation of total C to C, there is a VDA component in respect of the Total Minimum Wages being paid to Contract Workmen.
While as per Sec. 2(b) of the EPF Act 1952 Basic Wage does not include any Dearness allowance but as per Section 6 of EPF Act "The Contribution which shall be paid by the Employer to the Fund shall be (10%), of the Basic Wages, (Dearness allowance and retaining allowance (if any) for the time being payable to each of the employees.... ... ... ..... There is little bit ambiguity whether PF is to be paid only on Basic wage(on par with company regular employees or on 50% of the total Minimum Wage as at present for the Contract Workmen or on 100% of Basic wage + VDA ie; total Minimum wage.
Also pl.quote relevant settled citations, if any on this for my professional guidance pl.
Thanks,
LV Sastry
Mobile: 09866077163.
Mail ID: [Login to view].
Date : 24.01.2017.