Salary Mix-up in NGOs: Is the Correction Fair or Are Employees Losing Out?

Dear All,

In an NGO/company, employees under the same grade are supposed to receive the same salary benefits. For those who have been in the same grade for a couple of years, their increment is typically added to a separate component. However, due to a mistake, the increment amount was distributed across all components, leading to changes in basic salary, HRA, and PF. The issue has now been rectified, and the amounts redistributed accordingly. Despite this correction, employees feel they are at a loss as their basic salary has decreased alongside their PF contribution.

Can anyone, especially law experts, shed some light on whether the process was correct or incorrect?

Thanks,
Usha

Hi, After the increment, before processing the salary, if you have revised the components, then there won't be any problem. But after the increment, if the salary is processed for a couple of months and now if you are planning to restructure the components, including reducing the basic, then it will be right. You cannot reduce the basic once PF contribution is made.

Adding the whole increment to a separate component is also strange. Actually, it should be bifurcated into all components of salary.