I am working in karnataka, every year there will notification for making payment for minimum wages, by saying Basic and DA and fix nearly Rs.2842(Basic-2545 and VDA-297)
I agree that we have to pay this wages to the employees. We will pay not as two components. It will be paid as below.
DA : 1842.00
CCA : 500.00
Please confirm, we can pay as stated above because I am paying more than the minimum wages.
Rule 22 (2) of the Minimum Wages (central) Rules defines "wages" as under
Wages shall mean all remuneration payable to an employed person on the fulfillment of the contract employment and includes HRA. It excludes
(i) The value of rent free accommodation, supply of light, water, medical .....
(ii) Contributions paid by the employer towards the PF or any scheme of social insurance
(iii) Travelling allowance / Travelling concession
The wages may consists of
(i) a basic rate of wages and special allowance call the cost of living allowance
(ii) a basic rate with or without cost of living allowance plus any concession on the supply of essential commodities.
Since in your case the basic and DA (assuming you are deducting PF on this) exceeds the stated minimum wages you are safe.
The Minimum Wages notification is brought out by the State Labour Department bi-annually. The Rate specified is the Minimum Wages an Employer must pay to employees covered under the Act. In addition to Minimum Wages some states like West Bengal have a compulsory HRA provision which must also be paid.
So, in absence of above the Minimum Wages must be paid and on it both ESI and PF is deducted. There is no provision in MW where you can divide the Wages into components. At least PF authorities charge PF on the Minimum Wages.
I would like to state that it is absolutely legal for an Employer to pay the Minimum Wages only.
pl. guide me:
In uttaranchal the minimum wage is for clerk II category-3165 (Basic +DA).
Just let me know whether this should be minimum Basic or we can bifircate this into Basic+DA+HRA since HRA is included in Minimum wages and the entire amount exceeds Minimum wage.Pl. advise,its urgent.
is it correct.
Pl. let me know.
The Minimum Wages enforcement machinery is sometimes not very clear on the quantum of Basic wages (which attracts PF,Gratuity,Bonus).
However, as a thumb rule, I have seen some labour inspectors in some states - look at the concept of 60-40 - that is Basic wages should not be less than 60% of Gross salary and the Allowances should be the balance.
You can check with your local industries/industry association about this.
Better to be safe than sorry at the time of your next labour inspection :))
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