Can Gross Pay Be Fixed As Basic Pay

Dear All,
Employers fix gross pay as basic pay. There is no bifurcation of gross pay. Don't want to bifurcate Basic/HRA/ Conveyance etc. So now a days due to these reason employers are having alternative but employees suffer and the same is accepted by the statutory authority.Is it justified
MK Verma

Dear Verma ji,
Employer can fix basic wages as gross if HRA Act is not applicable to him. There is no law which says the employer should pay other / various allowances except in some states, there is minimum HRA Act.
Basic includes Dearness Allowance.

Dear Verma,

Your question is little bit confused.

I trying to reply it in simple way.

First of all Minimum Wages Act talks only about the MINIMUM WAGES + DA.

There is no completion of any type of allowances as such. In few states they are

having such obligation with some conditions. For example in Maharashtra under Shop & Establishment Act. 10% HRA is applicable if there are more than 50 employees.

Now coming to the point, now a days most of the companies paying wages/salaries more than the Minimum wages+DA. To save the cost to the company while FFS, the excessive portion of the said salary is normally get bifurcated under different head of allowances. Similarly it is also taken care for the employees while fabricating allowance structure that they would be getting Income Tax benefit like HRA, Conveyance, Medical reimbursement etc.. But by doing so, company many time faces with the TDS problem [which is very tedious] due to non compliance of concern documents from the employees for their tax saving.

Under the circumstances, the company [which you have mentioned in your posting] might be ready to incurred the more cost on employees FFS.i.e. gratuity, leave encashment than these problems.

As far as the authorities are concern, when the company is paying gross / lump sum salaries "As per or More than MW + DA", they do not have objection.

Normally such HR policies are frame out by the Management and also with the Mutual understandings with employees.

I hope you will be satisfied by this reply.

Regards,

Pramod Thakar

9822435423, Pune

Consider Gross Pay is More Than Minimum Wages of the respective state but the gross pay which fixed is more than the epf limit that is Rs.6500/-
Suppose Minimum Wages is Rs.5500/- but the employee is getting Rs.9000/- P.M. gross and the same gross amount is fixed as Basic Pay, here epf is not compulsary because his Basic Pay fixed is 9000/- and the same is gross pay.and the statutory authority having no objection.
Here the employer is able to exercise his own decision by debarring the employee from epf benefit.
Secondly in the same organization maximum workers are being fixed basic pay as explained above and some percentage are having bifurcation of Salary.
Is it correct.
MK Verma