Hello, Please advise me whether splitting of minimum wages in various heads (Basic,HRA,washing allowance etc ) is legal for purpose of reduceing pf & esi contribution . With regards Ashe
From India, Dehra Dun
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4From India, Dehra Dun
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Minimum wages should not be splitted for PF contribution which is paid on basic+DA ESIC is paid on gross salary.
From India, Pune
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From India, Pune
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Minimum Wage and Allowances
The minimum wage cannot be split at all. In fact, there was a hearing by the High Court in August where it was stated that uniform allowances will also be considered as a part of the basic salary. Consequently, PF will be deducted and paid by the employers on Basic + DA + Uniform allowance thereafter. This ruling applies to both workers and staff. You can inquire about it.
Thanks,
Garima
From India, Lucknow
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The minimum wage cannot be split at all. In fact, there was a hearing by the High Court in August where it was stated that uniform allowances will also be considered as a part of the basic salary. Consequently, PF will be deducted and paid by the employers on Basic + DA + Uniform allowance thereafter. This ruling applies to both workers and staff. You can inquire about it.
Thanks,
Garima
From India, Lucknow
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Prohibition on Splitting Minimum Wages for PF Contribution
Vide Circular No.: Coord/4(6)2003/Clarification/Vol-II/Dated: 23-05-2011, Mr. K.C. Pandey, Additional Central P.F. Commissioner (Compliance) of the Employees Provident Fund Organization (Ministry of Labour & Employment, Govt. of India), Head Office, Bhavrshya Yidhr Bhawan, 14, Bhikaiji Cama Place, New Delhi, prohibited the splitting of Minimum Wages for the purpose of PF contribution.
There is very good news in this regard. The Delhi High Court, in the matter of Pvt Security Industries vs. EPFO on 30-08-2011, by the order of Hon'ble S. Muralidhar, has granted a limited stay on the circular. Similarly, the Andhra Pradesh High Court on 29-09-2011 has granted an interim stay in Writ Petitions filed before the said Court.
Therefore, the Circular No.: Coord/4(6)2003/Clarification/Vol-II/Dated: 23-05-2011 of Mr. K.C. Pandey, Additional Central P.F. Commissioner (Compliance) of the Employees Provident Fund Organization (Ministry of Labour & Employment, Govt. of India), Head Office, Bhavrshya Yidhr Bhawan, 14, Bhikaiji Cama Place, New Delhi - 110 066, prohibiting the splitting of Minimum Wages for the purpose of PF contribution, has now come under judicial review, and its enforcement is subject to the legal decision.
From India, Madras
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Vide Circular No.: Coord/4(6)2003/Clarification/Vol-II/Dated: 23-05-2011, Mr. K.C. Pandey, Additional Central P.F. Commissioner (Compliance) of the Employees Provident Fund Organization (Ministry of Labour & Employment, Govt. of India), Head Office, Bhavrshya Yidhr Bhawan, 14, Bhikaiji Cama Place, New Delhi, prohibited the splitting of Minimum Wages for the purpose of PF contribution.
There is very good news in this regard. The Delhi High Court, in the matter of Pvt Security Industries vs. EPFO on 30-08-2011, by the order of Hon'ble S. Muralidhar, has granted a limited stay on the circular. Similarly, the Andhra Pradesh High Court on 29-09-2011 has granted an interim stay in Writ Petitions filed before the said Court.
Therefore, the Circular No.: Coord/4(6)2003/Clarification/Vol-II/Dated: 23-05-2011 of Mr. K.C. Pandey, Additional Central P.F. Commissioner (Compliance) of the Employees Provident Fund Organization (Ministry of Labour & Employment, Govt. of India), Head Office, Bhavrshya Yidhr Bhawan, 14, Bhikaiji Cama Place, New Delhi - 110 066, prohibiting the splitting of Minimum Wages for the purpose of PF contribution, has now come under judicial review, and its enforcement is subject to the legal decision.
From India, Madras
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Copy of PF Circular with Judgement copy is enclosed for ready reference. Regards, sundararaman
From India, Madras
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From India, Madras
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For your information, reference, and records, another landmark verdict was given by the EPF Appellate Tribunal in Indore regarding the splitting of Minimum Wages for PF Contribution, which has been a subject of dispute.
Regards,
B. Sundararaman
Please refer to the attachment.
From India, Madras
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Regards,
B. Sundararaman
Please refer to the attachment.
From India, Madras
Acknowledge(0)Amend(0)CiteHR is an AI-augmented HR knowledge and collaboration platform, enabling HR professionals to solve real-world challenges, validate decisions, and stay ahead through collective intelligence and machine-enhanced guidance. Join Our Platform.
Minimum Wages, ESI & PF.pps
EPF-Circular-da ted-23-May-2011 -Splitting-of-M inimum-Wages-fo r-the-Purpose-o f-PF-Contributi on-Not.pdf