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Minimum Wages Calculation. - Commodities

skarnam Started The Discussion:

Dear friends,

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.

Basic: 1500.00
DA : 1842.00
CCA : 500.00
Att.Bonus:200.00
Total :4042.00

Please confirm, we can pay as stated above because I am paying more than the minimum wages.

with regards
mahesh

Sunil Joshi - Contributing Member
Dear Mahesh,

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
(iv) Gratuity

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.

Best wishes,

Sunil Joshi

:)

Dear Mahesh,

You need to pay the min wage as indicated under enactment. This amount is considered for long term benefit calculations.

Secondly, whatever you pay over & above this amount is your will & wish and on what ever account.

With warm regards,
manjunatha pg

gitanjali - Contributing Member
DEAR ALL,

I have one query.

how much mininum basic wage should be paid to an employee in metros. and is DA inclusive in minimum wages.

As far as i know mininmum basic has been fixed as 3314/-

can anyone ellaborate on that.

Regards
Gitanjali

swastik73 - Contributing Member
Dear Mahesh,

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.

Regards,
SC

anagha - Contributing Member
Hi All
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.
eg:
Basic-2000
DA- 200
HRA 1300
Conveyance allowance-800
Total-4300

is it correct.
Pl. let me know.

Rgs
ANAGHA

sashi_patnuri - Contributing Member
Hi Can any one guide me about the Maharastra minimum Wage information and the Calcution. Its Urgent Regards, Sashi

arunkumar - Contributing Member
Dear All,

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 :))

Regards

P.Arun Kumar

arunkumar - Contributing Member
A small addition to what I had mailed earlier - the concept of 60-40 breakup in Basic wages and Allowances - is seen more by the PF inspectors who look the quantum of contribution vis a vis the overall Gross salary of the employee.

Regards

P.Arun Kumar

4hrd - Contributing Member
pl. guide me in the following case

we appointed an accountant (Delhi/NCR) his salray structure as below

Basic : 2800
HRA:1450
Conveyance:1250
Total : 5500/-

it is correct structure or we have to pay him basic VDA etc.

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