Minimum Wages - Pdf Download [thread 366418]

Hello,

Please advise me whether splitting of minimum wages into various heads (Basic, HRA, washing allowance, etc.) is legal for the purpose of reducing PF and ESI contributions.

With regards,
Ashe

Minimum wages should not be split for PF contribution, which is paid on basic+DA. ESIC is paid on gross salary.

Thank you.

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

Dear Member,

Please see the below link for PF office clarification regarding the salary.

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All the best

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Vide Circular No.: Coord/4(6)2003/Clarification/ Vol-II/ Dated: 23-05-2011, Mr K.C. Pandey Addl. Central P.F.Commissioner(Compliance) Employees Provident Fund Organization (Ministry of Labour & Employment, Govt. of India), Head Office, Bhavrshya Yidhr Bhawan, 14, Bhikaiji Cama Place. New Delhi prohibited 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 limited stay of the circular .Similarly Andhra Pradesh High Court on 29.09.2011 has granted interim stay in Writ Petitions filed before the said Court.

Therefore the Circular No.: Coord/4(6)2003/Clarification/ Vol-II/ Dated: 23-05-2011of Mr K.C. Pandey Addl. Central P.F.Commissioner(Compliance) 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 splitting of Minimum Wages for the purpose of PF contribution has now come for Judicial review and its enforcement is subject to the legal decision.

Copy of PF Circular with judgment copy is enclosed for ready reference.

Regards,
Sundararaman

Dear Members,

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.