In a letter last week, the Labour Ministry has asked the Employees' Provident Fund Organisation (EPFO) not to go ahead with clubbing wages with basic pay.
The EPFO will soon issue a notification in this regard.
"We will definitely protest against this anti-worker move. We will soon write about this to the Election Commission as well as the Labour Ministry," All-India Trade Union Congress D L Sachdev told PTI.
"The government cannot do this as model code of conduct is in force. Splitting of wages has been a problem for a long time. Employers split wages into allowances to reduce their PF liability," Sachdev, who is also an EPFO trustee, said.
All-India General Secretary Bharatiya Mazdoor Sangh Virjesh Upadhyay said: "This is an anti-worker move and we will protest against this. We will be writing to the Election Commission and the Labour Ministry about this on Monday."
He said "since model code of conduct is in place it is inappropriate on the part of government take such decision (rejecting the proposal). Now, ethically it is a new government which should take a call on the issue after elections".
According to experts, clubbing of wages with basic pay would increase savings of organised workers. Employers are against this because it would result in their increased financial burden on account of PF dues.
In a worker-friendly move, the EPFO had issued a circular on 30 November, 2012 redefining 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".
The notification was, however, put in abeyance later and a committee was constituted by the EPFO to look in the matter and recommend the further action to the Labour Ministry.
The review committee, constituted to look into the issue, had supported the idea for enhancing the social security benefit under the EPF scheme run by EPFO.