Substitute for 'Special Allowance'

Human Resources » Compensation & Benefits

	Message From: sumit_hr	Total Posts: 23	Join Date: 15/08/2006
Rank: Executive	Post Date: 15/12/2006 01:35:37	Points: 115	Location: United States

Dear all,

Would like to know your views on the following:

Is there any statutory complication or any other issue in using the term "Special Allowance" as a part of Salary Structure for the employees, specifically in terms of attracting PF. If yes, Can you please guide as what substitute can we use in its place.

Sumit

	Message From: ayeshaa	Total Posts: 29	Join Date: 15/08/2006
Rank: Executive	Post Date: 15/12/2006 01:38:34	Points: 145	Location: United States

PF contribution will not attract at all On "Special Allowance". PF contribution will only attract on Basic,DA & cash value of food concession if any.

Regards
Ayesha

	Message From: msantos	Total Posts: 24	Join Date: 15/08/2006
Rank: Executive	Post Date: 16/12/2006 01:09:23	Points: 120	Location: United States

Dear sumit,

Recently few High Courts (Kolkatta/Gujarat) have given judgment that; Special Allowance attracts PF.

Extract:
Instead paying it as basic - companies in order to avoid pf - have changed the nomenclature as special allowance - where as there seems to be no substantial logic or policy for paying special allowance - hence it should be treated as basic - and pf should be contributed.

Based on this judgment, RPFC had sent internal circular to all PF commissioners to regulate this during their inspection.

Hence it is better for the corporates to look into this seriously and regulate with top priority.

My suggestion it to pay as - conveyance allowance or professional development allowance - if it is not part of your salary structure.

Regards,

msantos

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