Labour minimum wages - pf deduction applicable as per central law

Dear All,

I need suggestions regarding the basics for the deduction of PF on labor/semi-skilled/skilled workers, etc. If an unskilled laborer's minimum wage is Rs 359/day (which includes basic + VDA) and he is being paid more than the minimum wage, for example, Rs 400, is it acceptable to divide Rs 400 into B + VDA and other components? For instance, allocating 50-60% as basic + VDA on Rs 400 and the rest as an allowance for deducting PF on the 50-60% of the total.

Kindly provide your opinions and suggestions.

Thank you.

Dear friend,

Wages are a total package of monetary consideration receivable by an employee for the services rendered by him during any wage period, and so are the statutory minimum wages too. Therefore, when the industry wages comprise certain other components in addition to basic wages and variable dearness allowance as fixed under the MW Act, its parity with the statutory minimum wages has to be determined only with reference to the sum total of industry wages minus the value of additional components, if any, excluded from the definition of "wages" u/s 2(h) of the Minimum Wages Act, 1948.

However, the ratio of componential apportionment of the industry wages should not be done in such a manner that certain other statutory benefits like EPF, Bonus, Gratuity get reduced, for it may lead to severe objection by the concerned statutory authorities and industrial disputes by workmen or their union later.