Can I Split Minimum Wage for PF Contributions in Uttar Pradesh? Seeking Advice

Dear Sir/Madam,

As per the Minimum Wage Act for Uttar Pradesh, the minimum wage for unskilled labor is Rs. 7215. Can I bifurcate this amount as Rs. 4000 for Basic, Rs. 2000 for HRA, and Rs. 1215 for other allowances? Consequently, I would need to deduct and pay PF contributions at 12% of Rs. 4000, which amounts to Rs. 480.

Dear Manoj,

No, you must cover the full minimum wages as basic salary under EPF. All allowances except HRA will be considered as PF Wages.

Regards,
Boopathi.N

Dear sir,

Please pay PF CONTRIBUTION ON NOTIFIED wages only; a legal and correct advice.

Regds,

PF Contribution and Minimum Wages

PF contribution under the Act of 1952 has no relation whatsoever with the minimum wages fixed under the Act of 1948. PF contribution has to be paid only on the basis of basic wages as defined under Section 2(b) of the Act of 1952, as well as DA/Retaining allowance, if any, in terms of Section 6 of the Act of 1952.

PF authorities have no power under the PF Act to direct the establishment to remit PF on minimum wages prescribed by the State Government. The issue is pending in the Supreme Court in Appeal Civil 9284/2013 between Asstt. PF Commissioner vs. M/s G4S Security Services, and there is no stay on the judgment of the Division Bench of P&H High Court.

However, it is better to pay PF contribution on the basic wages, which is a component under the minimum wages declared by the State Government.

Regards, S. Sensharma, Industrial Law Consultant, Meerut