Hi, I have a few doubts regarding the position of employers with respect to the Supreme Court decision. I understand it is just a reiteration with clarity of existing facts in law, but I would like to know the position of employers who have computed PF on basic (which is less than 15k) and now they are required to compute PF after this judgment, including allowances.
I understand from the March salary they are liable to pay an amount of PF contribution equal to 12% of 15k or salary arrived at after including the allowances. Are they liable to pay it retrospectively as arrears to previous months as well?
From India, Chennai
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I understand from the March salary they are liable to pay an amount of PF contribution equal to 12% of 15k or salary arrived at after including the allowances. Are they liable to pay it retrospectively as arrears to previous months as well?
From India, Chennai
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Crux and key pointers
1. The PF ceiling of ₹15,000 per month remains the same; it has not been revised.
2. If the minimum PF contribution as per the ceiling is paid, i.e., ₹1,800 per month from both the employee and employer, then there is no need to make any changes.
3. If the contribution is less than ₹1,800 and if the gross salary is more or up to ₹15,000 per month, where the basic salary is less than ₹15,000 and the remaining amount is bifurcated among different heads, then excluding HRA and statutory bonus, all other heads should be considered with basic salary for framing PF wages up to ₹15,000 or on the total of all heads. If the total of all heads is less than ₹15,000, then the entire total amount arrived at should be considered as the wage for PF calculation.
4. There is no new provision; it is an interpretation of the existing section/term. Hence, the date of implementation is not expected as it is an ongoing rule.
5. The PF authority has referred to the verdict of the Supreme Court while conducting inspections and calculating liabilities up to the wage ceiling as defined under the law.
From India, Pune
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111. The PF ceiling of ₹15,000 per month remains the same; it has not been revised.
2. If the minimum PF contribution as per the ceiling is paid, i.e., ₹1,800 per month from both the employee and employer, then there is no need to make any changes.
3. If the contribution is less than ₹1,800 and if the gross salary is more or up to ₹15,000 per month, where the basic salary is less than ₹15,000 and the remaining amount is bifurcated among different heads, then excluding HRA and statutory bonus, all other heads should be considered with basic salary for framing PF wages up to ₹15,000 or on the total of all heads. If the total of all heads is less than ₹15,000, then the entire total amount arrived at should be considered as the wage for PF calculation.
4. There is no new provision; it is an interpretation of the existing section/term. Hence, the date of implementation is not expected as it is an ongoing rule.
5. The PF authority has referred to the verdict of the Supreme Court while conducting inspections and calculating liabilities up to the wage ceiling as defined under the law.
From India, Pune
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PF Wages-Court decision - Wage for Contribution.pd f
Recent Judgment of Honble Supreme Court on Wage eligible for contribution.pp tx