Retirement fund body EPFO (Employees Provident Fund Organisation) has kept in abeyance, its circular that seeks to tighten norms for initiation of inquiry against employers in provident fund (PF) cases and clubbing of allowances with basic wages for computing PF contribution.
"It has been decided to keep the circular in abeyance with immediate effect and till further orders," another EPFO circular said on 18th December.
EPFO issued a circular on 30th November that had asked employers to deduct the subscription from the gross salary, including allowances, a move that would have reduced the take-home salary of over 5 crore workers.
The EPFO circular also sought to tighten norms for initiation of inquiry against employers in PF cases and clubbing of allowances with basic wages for computing PF contribution.
The circular had also redefined the meaning of "basic wages" for the purpose of PF deductions and said, "All such allowances which are ordinarily, necessarily and uniformly paid to the employees are to be treated as the basic wages."
However, the employers are not much happy with the EPFO's move to deal with splitting of wages by them which help them to reduce their PF contribution obligation substantially.