Dear All, my question is what should be the basic salary. Should the basic salary be equal to minimum wages? Should the basic salary be a percentage of the gross salary?
Minimum Wages Fixation Rule
As per the minimum wages fixation rule, these norms consist of: (i) three consumption units for one wage earner without incorporating the earnings of women, children, and adolescents; (ii) a minimum food requirement of 2,700 calories per adult person per day; (iii) clothing requirements at 72 yards per annum for an average working family of four; (iv) a house rent corresponding to the minimum area provided for under the Government's Industrial Housing Scheme; and (v) 20 percent of the total minimum wage for fuel, lighting, and other miscellaneous items.
Basic Wages Definition Under EPF Act
As per the basic wages definition under the EPF Act, “basic wages” means all emoluments which are earned by an employee while on duty or on leave or on holidays with wages in either case in accordance with the terms of the contract of employment and which are paid or payable in cash to him, but does not include: (i) the cash value of any food concession; (ii) any dearness allowance (that is to say, all cash payments by whatever name called paid to an employee on account of a rise in the cost of living), house-rent allowance, overtime allowance, bonus, commission or any other similar allowance payable to the employee in respect of his employment or of work done in such employment; (iii) any presents made by the employer.
Contradiction
My doubt is under the fixation method of minimum wages, the expense on house rent is also considered but in the definition of the EPF Act, house rent allowance is not considered. In this scenario, how can basic wages under EPF be equal to minimum wages? Please advise what should we do for the fixation of basic wages for PF purposes.
Thanks, Mukund Roy
[Phone Number Removed For Privacy-Reasons]
Location: Delhi, India
Minimum Wages Fixation Rule
As per the minimum wages fixation rule, these norms consist of: (i) three consumption units for one wage earner without incorporating the earnings of women, children, and adolescents; (ii) a minimum food requirement of 2,700 calories per adult person per day; (iii) clothing requirements at 72 yards per annum for an average working family of four; (iv) a house rent corresponding to the minimum area provided for under the Government's Industrial Housing Scheme; and (v) 20 percent of the total minimum wage for fuel, lighting, and other miscellaneous items.
Basic Wages Definition Under EPF Act
As per the basic wages definition under the EPF Act, “basic wages” means all emoluments which are earned by an employee while on duty or on leave or on holidays with wages in either case in accordance with the terms of the contract of employment and which are paid or payable in cash to him, but does not include: (i) the cash value of any food concession; (ii) any dearness allowance (that is to say, all cash payments by whatever name called paid to an employee on account of a rise in the cost of living), house-rent allowance, overtime allowance, bonus, commission or any other similar allowance payable to the employee in respect of his employment or of work done in such employment; (iii) any presents made by the employer.
Contradiction
My doubt is under the fixation method of minimum wages, the expense on house rent is also considered but in the definition of the EPF Act, house rent allowance is not considered. In this scenario, how can basic wages under EPF be equal to minimum wages? Please advise what should we do for the fixation of basic wages for PF purposes.
Thanks, Mukund Roy
[Phone Number Removed For Privacy-Reasons]
Location: Delhi, India