EPFO loses case (20.07.2011) on Minimum Wage applicability to PF

A few days back in the case of Assistant Provident Fund Commissioner, Gurgaon Vs. G4S Security Services (India) Limited & Anr, 2011 LLR 316, the Punjab & Haryana High Court held that the provident fund contributions are not necessarily to be paid on the wages as fixed under the Minimum Wages Act.

Aggrieved by the Order, EPFO filed a Letters Patent Appeal No. 1139 of 2011 before the Division Bench challenging the order of learned Single Judge.  The Division Bench, comprising of the Hon’ble Chief Justice Adarsh Kumar and the Hon’ble Justice A.K. Mittal, on 20.07.2011 dismissed the appeal.

So now the applicability stands as follows – ‘PF need not be calculated on the Minimum Wages’.

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6 Responses to “EPFO loses case (20.07.2011) on Minimum Wage applicability to PF”

  1. Hi,

    As per the notification of PF in the month of Feb/ March 2011. The PF contributions should be on the total wages paid to workers. Whether it is RS 150/- OR Rs200/-.
    I think this dismissal is contradictory.

  2. The court order only states that PF contribution need not be paid on minimum wages. Nevertheless the components of wages will be scrutinized. Only HRA is excluded from the calculation. I can’t comment on if it is Rs. 200 or Rs. 150 as it is dependent on the minimum wages of the respective State.

  3. Mangesh Wakodkar 22. Aug, 2011 at 2:55 pm

    In Minimum Wages Act the provision of special allwoance is itself is very confusing word.The law must be clear with its intention.For eg Minimum wages of Maharashtra state is like
    Basic- 4000

    Special Allowance-1060

    In this case Minimum wages as per the circular of EPFO is 5060/- upon which 12% contribution i.e Rs.607/-is to be deducted
    Now what is the decisiono of Hariyana -Punjab high court is not cleared the calculation for PF deduction.Can any body please clear my doubt.

  4. please show me copy of above court decision


  5. Dear All,

    As per the minimum wages the employer is paying the PF contribution.
    Eg: basic 5800* PF 12%

    Whether if salary is Rs.10000/-
    Basic +VDA = 5800
    HRA = 2000
    conveyance = 1000
    Performance reward = 1200

    If employer is paying on Rs.5800/- is correct or we have to take Conveyance + performance reward amount also for working PF

    please advice.


  6. Dear Sir,

    It is wrong. Here you can only exclude HRA from the calculation of PF.