Can My Charitable Trust Really Cut My Basic Salary in Half? Seeking Legal Insights

Greetings for the day,

Presently, I am working with a charitable trust. Recently, our basic salary has been reduced from Rs. 17,000.00 to Rs. 8,000.00 per month as per the minimum wages in Gujarat. My question is, "Can the basic salary be reduced?"

I kindly request your valuable inputs on this matter. Additionally, if any cases have been awarded in court regarding this issue, please share the details.

Thank you.

Hi Jeetendra,

The basic salary cannot be reduced.

Regards,
Ritambhara

Dear Mr. Rawal, you are an HR professional; you should know that salary cannot be reduced. I hope your Trust is deducting PF, etc., and other applicable statutory dues from your salary. You are not covered under Minimum Wages by virtue of being a Manager. How long have you been working there? What basic salary was mentioned in your appointment letter? Has this reduction in basic salary reduced your take-home salary? Have they increased the allowances? If you answer these questions, it will help us address your problem.

With warm regards,

Bharat Gera
HR Consultant

Mr. Jeetendra,

Which category/sector of minimum wages is applicable to your "Charitable Trust"? Please share the relevant Minimum Wages Notification made applicable to your Charitable Trust. Since when are minimum wages made applicable? Is it with a retrospective date or prospective date? By virtue of reducing your basic salary, is your gross salary also reduced? Is it a restructuring of salary components? How does it impact EPF, bonus, and gratuity?

Salary Structure and Legal Considerations

There is nothing in law to prevent an employer from reducing any component of the salary structure. The salary structure is always left to the decision of the company.

Restrictions on Salary Reduction

The restrictions, on the other hand, are of a consequential nature:

- Concurrence of the employee is needed as this amounts to a change of terms of employment, which cannot be done unilaterally.
- Whether this results in reducing payment of PF or ESIC (not allowed).
- Whether there is any provision for the same in standing orders applicable in the state.