Dear All,
My Managing Director recently called me and told me that all people in the company, including him and other directors, are to be taken on the payroll of the company. He also mentioned that he should be given PF, professional tax, and other benefits exactly in the same manner as a regular employee.
We are a Pvt. Ltd. Company.
Now, my question is: can a Director or Directors be treated as an employee of the company? Can we allow them to have Provident Fund and other benefits? Kindly provide a reference to the Act or judgment.
Regards,
Govind
From India, Mumbai
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87My Managing Director recently called me and told me that all people in the company, including him and other directors, are to be taken on the payroll of the company. He also mentioned that he should be given PF, professional tax, and other benefits exactly in the same manner as a regular employee.
We are a Pvt. Ltd. Company.
Now, my question is: can a Director or Directors be treated as an employee of the company? Can we allow them to have Provident Fund and other benefits? Kindly provide a reference to the Act or judgment.
Regards,
Govind
From India, Mumbai
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Any director in the company receiving remuneration and perquisites would be termed as a whole-time director. The Managing Director is also a whole-time director. The terms of appointment of a whole-time director may contain benefits and facilities on par with other employees.
Suryanarayana SV
Practising Company Secretary
Hyderabad, India
[Suryanarayana S V](http://www.suryanarayana.com)
From India, Hyderabad
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Suryanarayana SV
Practising Company Secretary
Hyderabad, India
[Suryanarayana S V](http://www.suryanarayana.com)
From India, Hyderabad
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Yes the PF can be diducted from the salary of a Director but in the accounts book you need to enter the salary of director as Directors Remuneration not as salary. Vijay
From India, Delhi
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From India, Delhi
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Yes I do agree with Mr. Vijay, in fact director is first employee of the company. Regards, S. Vishwanath
From India, Hyderabad
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From India, Hyderabad
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I agree with Hyderabad, India, Suryanarayana S V's reply above but with the following qualifier:
The director of a private limited company owning a factory who has been appointed as its 'Occupier' under the Factories Act, 1948, cannot claim to be an 'employee'. He is treated as the 'employer', the person having ultimate control over the affairs of the factory.
From India
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The director of a private limited company owning a factory who has been appointed as its 'Occupier' under the Factories Act, 1948, cannot claim to be an 'employee'. He is treated as the 'employer', the person having ultimate control over the affairs of the factory.
From India
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Thanks a lot for your prompt response. This information is useful for me. Special thanks to Mr. Suryanarayana SV and Professor B J Bhadavle. Regards Govind
From India, Mumbai
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From India, Mumbai
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Dear All,
Suppose a retail company has 33% of its revenue allocated towards employee (manpower) costs, i.e., salaries paid to employees, and these expenses are inevitable. How can HR help reduce this manpower cost without decreasing the employee strength?
The company is a small enterprise in the retail sector, with all its revenue coming from retail sales through its stores spread across India.
From India, Mumbai
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Suppose a retail company has 33% of its revenue allocated towards employee (manpower) costs, i.e., salaries paid to employees, and these expenses are inevitable. How can HR help reduce this manpower cost without decreasing the employee strength?
The company is a small enterprise in the retail sector, with all its revenue coming from retail sales through its stores spread across India.
From India, Mumbai
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Dear Govind,
You should concentrate more on increasing the efficiency of the employees, rather than focusing too much on reducing costs. In the preview of your question, it's impossible for anyone in this forum to suggest ideas for cost reduction. It's you who have to analyze the costs incurred since the data, statistics, or processes are not available.
You can compare the costs incurred for manpower in the last two to three quarters. Then, the analysis has to be done by linking the same to efficiency and performance. There are numerous factors in HR. Without analyzing the scenario, if you directly focus on cost reduction, it might affect the motivational level of your employees.
Regards,
Sundar
From India, Bangalore
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You should concentrate more on increasing the efficiency of the employees, rather than focusing too much on reducing costs. In the preview of your question, it's impossible for anyone in this forum to suggest ideas for cost reduction. It's you who have to analyze the costs incurred since the data, statistics, or processes are not available.
You can compare the costs incurred for manpower in the last two to three quarters. Then, the analysis has to be done by linking the same to efficiency and performance. There are numerous factors in HR. Without analyzing the scenario, if you directly focus on cost reduction, it might affect the motivational level of your employees.
Regards,
Sundar
From India, Bangalore
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Friends,
The University Grants Commission (UGC) is an apex body in India that monitors and approves universities. However, it is one of the worst and most useless bodies under the Ministry of HRD, Government of India. In the past, I have complained to them many times about certain fake institutes offering degrees, and to my shock, they even offer medical degrees like MD, MBBS, Ph.D., etc. It is shocking to find that some of the top management (at the Director level) use these degrees to prefix "Dr." to their names.
As a Human Resources Professional, I am compiling a list of such fake institutes. Beware! Never hire any candidates from these institutes. For those planning to pursue higher studies, please do not choose these institutes for your degrees. A knowledgeable HR professional and a reputable HR department will never recognize these qualifications. I commend Pune University for self-monitoring such institutes to some extent and keeping its database updated.
I will re
From India, Mumbai
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The University Grants Commission (UGC) is an apex body in India that monitors and approves universities. However, it is one of the worst and most useless bodies under the Ministry of HRD, Government of India. In the past, I have complained to them many times about certain fake institutes offering degrees, and to my shock, they even offer medical degrees like MD, MBBS, Ph.D., etc. It is shocking to find that some of the top management (at the Director level) use these degrees to prefix "Dr." to their names.
As a Human Resources Professional, I am compiling a list of such fake institutes. Beware! Never hire any candidates from these institutes. For those planning to pursue higher studies, please do not choose these institutes for your degrees. A knowledgeable HR professional and a reputable HR department will never recognize these qualifications. I commend Pune University for self-monitoring such institutes to some extent and keeping its database updated.
I will re
From India, Mumbai
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Hi, Is the employer contribution to the Provident Fund through Employer Provident Fund Organisation (EPFO) is tax exempted? I am little confused about it. Please guide
From India, Mumbai
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From India, Mumbai
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Provident Fund Contribution and Tax Implications
Employer contribution toward PF is exempted up to 12% for all Recognised Provident Funds. However, if the employee withdraws the balance before 5 years of service, it will be taxable at the time of withdrawal.
Regards,
VENUGOPAL
From India, Bangalore
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Employer contribution toward PF is exempted up to 12% for all Recognised Provident Funds. However, if the employee withdraws the balance before 5 years of service, it will be taxable at the time of withdrawal.
Regards,
VENUGOPAL
From India, Bangalore
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