I would like to know if the minimum wages should go in the basic head or can we divide them into basic + HRA + conveyance. In my previous company, we kept minimum wages in the basic head, but in the new company, they divide the minimum wages into three categories (i.e., 60% minimum wages in basic, 30% in HRA, and 10% in conveyance), which is not correct as per the law.
Also, the PF ceiling is 15,000 now. So, if we divide a salary of 20,000 in the above ratio, the basic would be 12,000. Hence, the employee will be mandatory in PF. If we increase the basic to 15,000, then PF would be optional. So, please advise on how to divide the salary into different heads.
Thanks,
Swati
From India, Delhi
Acknowledge(1)
Amend(0)
1Also, the PF ceiling is 15,000 now. So, if we divide a salary of 20,000 in the above ratio, the basic would be 12,000. Hence, the employee will be mandatory in PF. If we increase the basic to 15,000, then PF would be optional. So, please advise on how to divide the salary into different heads.
Thanks,
Swati
From India, Delhi
Acknowledge(1)Amend(0)
Thank you for your valuable reply. Please confirm me one thing that the minimum wages amount is mandatory to keep in basic head or can be divided in basic+HRA+conveyance. Please reply me on this.
From India, Delhi
Acknowledge(0)Amend(0)
From India, Delhi
Acknowledge(0)Amend(0)
Dear Swati,
We should not bifurcate Min. Wages into Basic + HRA + Conveyance. It can only be Basic + DA or only Basic. Bifurcating into other components leads to non-compliance of statutory regulations, as it is a common practice followed by companies to reduce costs.
Thanks & Regards,
Prathap
Senior Executive-HR
Narayana Health.
From India, Madras
Acknowledge(0)Amend(0)
We should not bifurcate Min. Wages into Basic + HRA + Conveyance. It can only be Basic + DA or only Basic. Bifurcating into other components leads to non-compliance of statutory regulations, as it is a common practice followed by companies to reduce costs.
Thanks & Regards,
Prathap
Senior Executive-HR
Narayana Health.
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.
SALARY CAN BE SPLIT INTO COMPONENTS BUT NOT LESS THAN THE MINIMUM WAGES.docx
Splitting of minimum wages for PF in abeyance (1).pdf
Minimum Wages, ESI & PF.pps