Can Employee Reduce Wages To Reduce Statutory Benefits?

Can an employer reduce or bifurcate basic wages to reduce statutory burdens like EPF and ESI?

Answer (1)

Sakshi Yadav

Sakshi Yadav

  • Sector-1, Noida

If an employer cuts an employee's pay without telling him, it is considered a breach of contract. Pay cuts are legal as long as they are not done discriminatorily (i.e., based on the employee's race, gender, religion, and/or age). To be legal, a person's earnings after the pay cut must also be at least minimum wage. So, the Employer cannot do so.

Answered on 22 Jan 2020


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