Badish Jindal.
Ludhiana, May 30, 2013: In a communication to the Union Minister for Labour and Employment Mallikarjun Kharge, FASII national president Badish Jindal has written about new definition of “Basic Pay” proposed by EPFO under the Employees Provident Fund & Miscellaneous Provisions Act (EPF and MP Act) 1952.
Terming it “harmful” to the employee as well as the employer, he has stated that “FASII is of the firm view that the present definition of “Basic Pay” should continue under the said EPF Act of 1952.
It is learnt that the Employees Provident Fund Organisation (EPFO) is on the move to club various allowances with basic pay for calculating the employers’ contribution to provident fund (PF).
First of all, in the present circumstances, an employee has so much demands and pressures to bring more cash/money to his home as cost of education of children, prices of commodities, cost of new essentials like Computer, Cell-phone etc, cost of transport, cosmetics, medical expenses and other items are ruling high.
Therefore, clubbing other allowances for “Basic Pay” and EPF deductions thereon will hit the employee by restricting him to bring less cash to his home and will tie his hands in meeting the day-to-day demands and pressures.
Further, at the prevailing economic condition, any change in the definition of “Basic Pay” will have huge financial implication for the industry which, in turn, will damage the revenue aspect of the Government.
At present, many industries are extending coverage to employees who are receiving salaries above Rs.6500/- which is being the salary limit with reference to EPF. If the Government goes ahead in changing the definition of “Basic Pay”, the industries who are extending coverage to employees above the EPF limit will be discouraged and may opt out of EPF scheme for employees drawing salaries above the EPF limit which will hurt the EPFO enormously.
Moreover, the proposed move, we apprehend, will arm the inspectors with sweeping powers to classify any allowance with the proposed “Basic Pay”, and thus the proposed move will enable the “Inspector Raj” to thrive in the EPF Scheme.”
Finally, Jindal has said, “In view of the above stated facts, we implore you (the minister) to stall the EPFO’s proposal to change the definition of “Basic Pay” under the Employees Provident Fund & Miscellaneous Provisions Act (EPF and MP Act) 1952.
Jindal is also Member, Central Board of Trustees, Employees’ Provident Fund Organisation.