Special allowance paid by employer has to be included in basic wage for deduction towards PF: SC
NEW DELHI, March 2, 2019: The Supreme Court has held that special allowances paid by an employer to its employees have to be included in "basic wage" for deduction towards provident fund.
The top court said this while dealing with a question on whether special allowances paid by an establishment to its employees would fall within the expression "basic wages" under the provision of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 for computation of deduction towards provident fund.
The top court observed that no material was placed by the companies "to demonstrate that the allowances in question being paid to its employees were either variable or were linked to any incentive for production, resulting in greater output by an employee, and that the allowances in question were not paid across the board to all employees in a particular category or were being paid especially to those who avail the opportunity."
(PTI)