A Company, Central Public Section Undertaking, at Jharkhand disbursing salary to its regular employees as per directives of Central Govt. and PF is deducted on basic salary plus Dearness Allowances as announced by the Central Govt. on each quarter of the year.
However, the company is hiring contract employee through contractor and paying wages prescribing therein Basic wages and other allowances. The total of the wages payable is more than the minimum wages notified in the State of Jharkhand. The PF contribution is deducted on Basic wages as prescribed by the Company. But ESI contribution is deducted on total wages. If the PF contribution is deducted on the wages notified by the State Govt. then the PF contribution will be more as compared to the Company’s prescribed basic wages. In such circumstances there is a saving of EPF contribution by my Company. Also, the wages of Contractor employees is revised on yearly basis (i.e annual increment) and there is no provision of revision of Dearness allowance on half yearly basis.
My question is whether the company is violating the EPF Act as well as Minimum Wages Act also whether a CPSU can follow two different Acts for two different category of employees.
However, the company is hiring contract employee through contractor and paying wages prescribing therein Basic wages and other allowances. The total of the wages payable is more than the minimum wages notified in the State of Jharkhand. The PF contribution is deducted on Basic wages as prescribed by the Company. But ESI contribution is deducted on total wages. If the PF contribution is deducted on the wages notified by the State Govt. then the PF contribution will be more as compared to the Company’s prescribed basic wages. In such circumstances there is a saving of EPF contribution by my Company. Also, the wages of Contractor employees is revised on yearly basis (i.e annual increment) and there is no provision of revision of Dearness allowance on half yearly basis.
My question is whether the company is violating the EPF Act as well as Minimum Wages Act also whether a CPSU can follow two different Acts for two different category of employees.