Salary Cuts and PF: How Does a 30% Reduction Affect Provident Fund Contributions?

I need to cut employees' salaries by 30% of their CTC. Will PF remain the same, or will it be deducted by 30% as well?

As per Section 12 of the EPF & MP Act, you are not expected to reduce the PF qualifying salary. At the same time, if the present PF qualifying salary is above Rs 15,000, it can be brought down to Rs 15,000, but you cannot reduce it further. However, if the situation is so poor that the company cannot move ahead without a cost cut affecting the PF salary, you can try to convince the appropriate authorities. Since the statutory minimum wage is above Rs 15,000 in most of the scheduled employment, I don't feel it will be approved.

Adding to Madhu:

It is better to send the communication to the regional EPF commissioner about the situation and reason for the reduction of wages and EPF contribution. Additionally, you need to obtain written consent from each and every employee for the reduction.