Dear Sirs, What is the impact of the M.P. High Court's recent judgment which laid down the principle for the treatment of certain allowances like conveyance, special allowance, etc., as a component of "Basic Wages" for the purpose of Provident Fund liabilities if the same are being paid uniformly, necessarily, and ordinarily to all employees? The same may be utilized as per the merits of the case.
Possible Solutions
What is the possible way out as it will hike up the company's wage budget?
Please advise.
Thanks,
Sharad
From India, Mumbai
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2Possible Solutions
What is the possible way out as it will hike up the company's wage budget?
Please advise.
Thanks,
Sharad
From India, Mumbai
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You can add the recent Madras High Court ruling (elsewhere I have posted it in this forum) on these types of allowances as well.
Future Salary Structure Changes
In the near future, there will be only two to three components in the salary structures like Basic and DA, HRA, and some allowances like Washing Allowance, etc. Nowadays, as all the salaries are fixed in CTC, the change in components will not affect much. Modifications within the salary will be made without altering the CTC. For earnings over 15,000, these rulings will not have any significant impact on salary structures.
Let us wait for some more comments from our members...
Regards,
S. Sethupathy, Excellent HR Services, Erode.
From India, Coimbatore
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Future Salary Structure Changes
In the near future, there will be only two to three components in the salary structures like Basic and DA, HRA, and some allowances like Washing Allowance, etc. Nowadays, as all the salaries are fixed in CTC, the change in components will not affect much. Modifications within the salary will be made without altering the CTC. For earnings over 15,000, these rulings will not have any significant impact on salary structures.
Let us wait for some more comments from our members...
Regards,
S. Sethupathy, Excellent HR Services, Erode.
From India, Coimbatore
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Regarding the Judgements of highcourts of MP and Madras and the Circular dated 23rd May 2011 — Is it going to have any retrospective implications?
From India, Kochi
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From India, Kochi
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Dear Sethupathy Sir, If we say that a person earning over 15k, these rulings will not make any significant effect. In that case, suppose a person is earning Rs. 60,000/- per month, which includes a basic of Rs. 20,000/- and other components like HRA, Special Allowance, Medical Allowance, etc. In case the employer's contribution is Rs. 2734/- now, it will be hiked to two times because of the inclusion of other components (Special Allowance, etc.) for PF applicability. The overall wage budget of the company is hiked.
Please advise.
Thanks,
Sharad
From India, Mumbai
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Please advise.
Thanks,
Sharad
From India, Mumbai
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Dear Sharad, As per Statutory norms you have to contribute only for 6500. S.Sethupathy, Erode
From India, Coimbatore
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From India, Coimbatore
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Madras High court judgement on PF contribtion.doc
Gratuity Madras High court Judgement[1].pd f