WHAT SHOULD WE DO WHEN FOLLOWING MINIMUM WAGES PRESCRIBED BY STATE AND THE NEW SLAB DESIGNED BY CENTRAL GOVERNMENT IN EPF DEDUCTION WHAT SHOULD IDEAL BASIC RATE DOES NOT INFRINGEMENT TO LAWS
From India, Mumbai
Acknowledge(0)
Amend(0)
From India, Mumbai
Acknowledge(0)Amend(0)
Dear RAMANIKLAL, Upon understanding your question, I would like to provide the following reply:
You need to follow the minimum rate of wages as declared by the State Government periodically, which is applicable to your industry and category of employees.
The rates declared by the State Governments are under the Minimum Wages Act. These rates include Basic and DA (Special Allowance in Maharashtra). You are obligated to pay the Basic and DA, or the Basic component inclusive of DA, as per the declared rates. These rates are the minimum amount you can pay; you cannot pay less than that. If you pay more than the minimum rate, there are no issues.
As mentioned, these rates only include Basic and DA; no allowances are included. There is no law requiring you to pay any allowance except in some states where there is a law mandating payment of HRA.
PF is deducted on Basic and DA, which is payable, not less than the minimum wage rate as applicable. In your words, this Basic and DA, which is paid not less than the minimum wage rate, is the IDEAL BASIC RATE and complies with the law.
I believe there might be a misunderstanding regarding PF law. The law stipulates that the contribution is to be deducted from Basic and DA, subject to a maximum of Rs. 15,000.
For example, if an employee is paid Rs. 16,000 per month as Basic + DA and is a PF member, the PF is deducted on Rs. 15,000 and not on Rs. 16,000.
I hope my reply addresses your query.
From India, Mumbai
Acknowledge(2)
Amend(0)
2584You need to follow the minimum rate of wages as declared by the State Government periodically, which is applicable to your industry and category of employees.
The rates declared by the State Governments are under the Minimum Wages Act. These rates include Basic and DA (Special Allowance in Maharashtra). You are obligated to pay the Basic and DA, or the Basic component inclusive of DA, as per the declared rates. These rates are the minimum amount you can pay; you cannot pay less than that. If you pay more than the minimum rate, there are no issues.
As mentioned, these rates only include Basic and DA; no allowances are included. There is no law requiring you to pay any allowance except in some states where there is a law mandating payment of HRA.
PF is deducted on Basic and DA, which is payable, not less than the minimum wage rate as applicable. In your words, this Basic and DA, which is paid not less than the minimum wage rate, is the IDEAL BASIC RATE and complies with the law.
I believe there might be a misunderstanding regarding PF law. The law stipulates that the contribution is to be deducted from Basic and DA, subject to a maximum of Rs. 15,000.
For example, if an employee is paid Rs. 16,000 per month as Basic + DA and is a PF member, the PF is deducted on Rs. 15,000 and not on Rs. 16,000.
I hope my reply addresses your query.
From India, Mumbai
Acknowledge(2)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.
PF Contribution on not less than Minimum Wage.pdf