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Appeal coming up in the Supreme Court for hearing on 10th August 2023 now postponed to 16th August 2023

Contents News/Article Date: 14th August 2023

Relating to which Act: The Employees Provident Funds & Miscellaneous Provisions Act, 1952;           

Penalty under the Act: Whoever, for the purpose of avoiding any payment to be made by himself under this Act [the Scheme, the [Pension] Scheme] or the Insurance Scheme] or of enabling any other person to avoid such payment knowingly makes or causes to be made any false statement or false representation shall be punishable with imprisonment for a term which may extend to one year, or with fine of five thousand rupees, or with both.

Applicable to which State: Whole of India

Type: Appeal coming up in the Supreme Court for hearing on 10th August 2023 now postponed to 16th August 2023

Pertains to: Splitting of minimum wages into HRA and conveyance allowance

Relevance of this news: Karma Global is in the business of HR Services, Payroll, Outsourcing and Regulatory Compliances right from its inception in 2004 and since then, has brought in a lot of efficiencies and technological upgradations with experts on its roll, to ease the hassles of Payroll Processing, Temp Staffing, On-boarding, Employee Life Cycle, Statutory, Regulatory and Payroll compliances by providing customized solutions to all its elite clients.

Now Karma Global is also fully into labour compliances for nearly 18 years and is helping both establishments and workers for fulfilment of obligations as per the laws of the land.  It has over 200 staff, both direct and indirect on its rolls and operates on pan India basis.  Recently, it has diversified into foreign shores as well, into countries like US, UK, UAE, Canada, Philippines, and Asia for handling payroll, outsourcing, recruitment and governance.

And in the current instance: Despite losing 3 forums, the EPFO filed an appeal in the Supreme Court which finally came up for hearing on 10th August 2023 but could not take place, and now the final date has been fixed for hearing on 16th August 2023.

Subject: Appeal coming up in the Supreme Court for hearing on 10th August 2023 now postponed to 16th August 2023


Appended is the complete news item


Splitting of minimum wages in house rent and conveyance allowance it may be recollected

The employers of the establishment covered under Employees Provident Funds & MP Act (hereinafter referred to as Act) would recollect that under section 7A of the Act the provident fund authority has held that for the purpose of provident fund contributions on basic wages and allowances the minimum wages as fixed by the governments could be split into HRA and conveyance allowance since both will not attract provident fund contributions. Being aggrieved the APFC Gurgaon filed an appeal before appellate tribunal but the order of the provident fund authority and writ petition was filed in Punjab & Haryana High Court in the caption ‘Assistant Provident Fund Commissioner vs. M/s. G4S Security Services (India) Ltd. and another, 2011 LLR 316 wherein it was held that the EPF Appellate Tribunal has rightly held that the provident fund contributions are not necessarily to be paid on the wages which are fixed under the Minimum Wages Act since the basic wages as defined under the EPF Act and the ‘wages’ as defined under the Minimum Wages Act are different hence the employer can split the minimum wages into allowances like house rent, the conveyance and washing allowance, etc., which would not attract provident fund contribution.

Still not satisfied with the order of EPF Authority and EPF Appellate Tribunals, the Employees Provident Fund Organisation filed a Letter Patent Appeal wherein by a judgment the Division Bench of the High Court (reported in 2011 LLR 943) reiterated that employees Provident Fund contribution will not be attracted on house rent allowance, conveyance allowance and washing allowances even when these form part of minimum wages as fixed under Minimum Wages Act.

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