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Minimum Wages Act - Contract Labour

Kedar Prasad Started The Discussion:

Sir,

I Want to Know about rules in Minimum Wages Act... Is there will be any problem if we pay to Contract labour more than minimum wage set by government?
For Ex: If Minimum Wage for a Unskilled Labour is 255/- we paid 270/- is this causes any issue??

Harsh Kumar Mehta - Contributing Member
Sir(s),
Law prohibits payment of wages less than 'minimum wages' as fixed by the appropriate government. In my opinion, there is no prohibition, if wages are paid more than as fixed as "minimum wages".
But as a general practice contract labour/employees engaged through Contractor are paid/disbursed wages by the Contractor and not by the principal employer. You can see from the records maintained by the Contractor whether the compliance of Minimum Wages Act is being made by the Contractor.
With regards;

bijay_majumdar - Contributing Member
Hi,
Under Minimum wages act the wages shown in each category of business activity Govt has prescribed the wages, below which one can not fix the wages.So Anything higher than minimum wages is always better and will not have any statutory issues as such.However under contract, it will be the responsibility of the principal employer to ensure that what ever wages are fixed it is disbursed by the contractors.

Thanks
Bijay

reddyrock2001 - Contributing Member
there is no need to worry if you pay more wages then the prescribed minimum wages. The problem only persists when the Minimum wages are paid less then the prescribed. P.Venugopal Reddy

mailbrij - 
Dear Kedar,

You can definately pay contract labour more than the minumum wages specified by the government notifications under Minimum Wages Act. Law sets the lower limit and definately the higher limits shall be no constrain

regards,

Brijesh

pon1965 - Senior Member
The word MINIMUM answers your query, per se. no further elucidation is required. pon

NehaG7 - Contributing Member
What do you mean by minimum wages?

A minimum wages is the lowest hourly, daily or monthly remuneration that employers may legally pay to workers. Minimum Wages have been provided by the Labor Departments of respective states.

HAPA (Human Resources and People Appreciation) which is a well-known low cost HRMS solution in the market, made specifically, keeping the needs of small and medium businesses in mind, takes care of all procedures to calculate salary along with PF, TDS, ESI, Gratuity etc. Bonus, Deductions, Incentives are all a part of the salary components. The same is also reflected in the salary-slips, which are auto generated and auto emailed to all the employees.

HAPA also updates the minimum wages mentioned above, in the application so that the HR or the Finance manager of the company is aware of the govt. policies/rules/regulations. HAPA does not forces a company to follow the rules, however makes sure that the company is notified about the same. The minimum wages of different set of employees are updated in HAPA as and when the government rules & regulations are amended or revised.

To know more about HAPA, click here: G7 CR Technologies

Who all are involved in setting minimum wages?
Decision jointly made by the Government, employer and trade union representatives

Government Acts On Minimum Wages:
There is separate minimum wage legislation in India. Minimum Wages Act, 1948 is an Act to provide for fixing minimum rates of wages in certain employments and it extends to the whole of India.

HAPA, complies by each state act in India and throws notifications to HRís and Finance managers regarding the minimum wage of all the employees as and when required. This helps the HR/Finance to be aware of the govt. rules and acts.

The Karnataka government has decided to revise minimum wages in 24 industrial sectors. The revised wages which came into effect from September 21, 2013 would be Rs 5044 (for A grade cities), Rs 4264 (for B grade cities) and Rs 3484 (C grade cities) on monthly basis. This would translate into Rs.194 daily wages for A grade cities, Rs.164 for B grade cities and 134 for c grade cities.

Rs.5044 For A grade cities Rs.194
Rs.4264 For B grade cities Rs.164
Rs 3484 For C grade cities Rs.134

The government also proposed to revise pay scales of city corporations. For Mahanagar Palike it would be Rs 5,980, City Corporation Rs 5720 and Rs 5200 for local bodies on monthly basis
For more details on Minimum Wages in Karnataka w.e.f. April 1, 2013 to March 31, 2014, click the link below.
Paycheck.in - Karnataka Minimum Wages 2013, India Minimum Wages

Benefits of minimum wages:

Helps Families:With minimum wage, the level of poverty is reduced.
Reduces Tax Burden:With minimum wage, the need for public assistance is lowered and this reduces the tax burden on the community and the state.
Employment Incentive:A minimum wage gives an unemployed person incentiveto take a job. An unemployed person can compare the money he gets from public assistance and compare it to the minimum wage to determine the financial incentive to taking a job.

Business Budgets:Without a minimum wage, it can be difficult for small businesses to budget their money. With a minimum wage in place, a small business owner knows what he will be expected to pay per hour and he can create new jobs with his company based on this budgeting information.
Common Reference:The minimum wage makes the hiring process easier for young or unskilled workers and employers. The worker knows upfront what kind of wage she can expect, and the employer does not have to go through the process of negotiating a wage with a new employee.
HAPA (Human resources And People Appreciation) automates complete HR activities end-to-end in an organization. It has features like, employee record management, payroll management, leave management, workstation management, attendance management etc.

To know more about the HRMS Software Solution HAPA click on the link given below:
G7 CR Technologies

Thank you for your Valuable Time.

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