whether employer statutory contribution is to be paid on weekly off or not ?

As per the Factory Act, every worker gets one day off weekly after every 6 days of work. Understand the IR team has given an opinion that minimum wage workers will not receive any employer statutory contributions for the weekly off. They will only receive statutory contributions such as PF, ESIC, EL, and PH for the 26 days worked.

Requesting your advice on whether employer statutory contributions should be paid for the weekly off or not?

The Factories Act only states that there shall be given one day of rest after 6 days of continuous work. The Act does not specify that this day off should be paid. Many companies calculate the salary based on 30/31 days, with Sunday's wages typically included in this calculation. Consequently, contributions to ESI and PF should also be based on 30/31 days in such cases.

However, if workers are paid for only 26 days, the question arises as to how PF and ESI contributions should be calculated for 30/31 days.

Dear Ananta,

For more clarity, I would also like to refer to Section 23(4) of the Minimum Wages (Central) Rules, 1950, which states:

"23(4) PROVIDED that where the minimum daily rate of wages of the employee as notified under the Act has been worked out by dividing the minimum monthly rate of wages by twenty-six, or where the actual daily rate of wages of the employee has been worked out by dividing the monthly rate of wages by twenty-six and such actual daily rate of wages is not less than the notified minimum daily rate of wages of the employee, no wages for the rest day shall be payable ..."

By following this provision, you will also be compliant with the statutory regulations concerning weekly off days.

Regards,

Dear Ananta,

I am a little confused by your post. Statutory dues are paid based on the actual salary and have nothing to do with the number of days worked. If an employee has a monthly salary, their PF and ESIC are paid based on their total salary (gross salary) paid. If they are absent for some days, the salary is proportionately deducted, and PF and ESIC contributions decrease accordingly.

Regarding earned leave (EL), the rule in a factory is 1 day for every 20 days worked. There is a debate on whether "worked" includes the weekly off. The generally accepted norm is that the weekly off is included as days worked. To that extent, your policy is wrong.

Thank you.

The post is all about whether it should be 26 days (or actual physical days worked) to be mentioned in the EPF/ESI records for an employee who works for a month of 30/31 days which will include weekly off days? It is not about the method of calculation of earned leave.