Hi all,
Minimum Wages pertains top scheduled employment. The appropriate govt (Central/State) issues Govt. Oreder (G.O) for particular industrial activity consisting of Basic wages and modalities of calculating DA. In most states there is also a residual category which takes care of industrial activity which is not covered by industry specific GO. IT/BPO is normally classified as Shops & commercial Establishments in the absernce of any specific G.O . Acording to a Supreme Court ruling in Airfreight industries case, if the sum total of gross emoluments is more than the minimum wages, then the employees/union can not claim DA over above this amount citing the Minimum Wages G.O. Many establishments have misused this judgment to keep the Basic at very low levels, without giving DA. This is inherently risky most of the statutes like the Payment of Bonus act, The EPF & MP Act, The Payment of Gratuity Act, etc prescribe benefits based on Basic & DA. So the employees can always move the competent forum to get benefits on par with basic notwithstanding the SC ruling. Though there is no statutory guideline, the EPF Organisation follows the thumb rule that 60% of Gross salary should be reckoned for PF compliance subject to the wage ceiling which is at present Rs6500/- (Also Note that Food allownace or cash value of any fiood concession is also wages for the purpose of PF Compliance)
So it is better to adopt a sliding scale, at the lower rungs of the salary ladder keep the Basic and DA strictly on par with minimum Wages GO and as you go up the ladder the Percentage of Basic & DA can proprtionately go down as per the HR Policy in the industry cum region.
Regards
Dr. Patrick Ryan
Advocate
21 B MIG Flats
P.T Rajan Road,
K.K Nagar, Chennai 78
27th May 2008 From India, Madras
In india there is no law that governs the minimum basic to be paid. The minimum wages act only stipulates total amount to be paid. That too when you are paying the total amiount stipulated by the act, there is no obligation on the part of the employer to pay under various headings such as dearness allowance and other allowances.
27th May 2008 From India, Vellore
Hi.
Minimum basic is fixed so that employees can get the benefit of PF on that minimum basic so you will have to keep the basic at minimum wages + any other benefit.i.e if the ctc is 5000 and min. wages is 3500 then the basic has to be be 3500 and rest other componenets can make that as CTC.
Praveen.

27th May 2008 From India, Mumbai
Dear Ayona,
Make sure that the 'Gross amount Value' should meet the min. wages in your state. Perticularly for Skilled or Highly Skilled Category.
'Basic' would be 40% of the Monthly Gross / CTC ( As applicable).
'HRA' Can be 40% to 50% of 'Basic' depending upon the 'Non - Metros' or 'Metros' as schedulded by the Standard of Living Index.
The Balance can be distributed as Other Allowances as per the eligiblity of an employee and /or the Company policy.
with regards,
Jayesh
27th May 2008
In out company we are calculating the Basic is Gross Salary *50% for staff For labours their no BASIC, DA, HRA and all only fixed BASiC (Gross wages) only. kps
27th May 2008 From India, Coimbatore
Dear Friend,
Minimum wages fixed by State Governments every six months. It depends on the category of employees. Category is depend on the nature of work the employee perform. Normally there are 6 category of employees:-
Unskilled
Semi skilled
Skilled
Non-matriculate
Matriculate but not graduate
Graduate and Above.
For your states minimum wages, you have to check the government notification.
It is a statutory obligation on the part of the management to pay minimum wages which is include only basic+D.A. Other allowance are not included in minimum wages. For PF, Bonus and other legal payment, basic and da is considered as minimum wages.
Thanks & Regards,
Kumaran Siva
27th May 2008 From India, Delhi
Dear All,

Each and every person has lame excuses; minimum basic salary is set by the state government and depends upon laws.

It is variable from state to state

Thanks

Pankaj Chandan
pankaj2ykchandan@gmail.com
27th May 2008 From India, New delhi
Dear Indrani, What you mean by Judgement? Do you mean minimum wages notification? If so, it wiil be available from concerned Labour Office. thanks & regards, siva
27th May 2008 From India, Delhi
Dear All As per SC Judgment in air freight
27th May 2008 From India, Kochi
Dear All,
I am Vasu, working for a Soft. co. as HR person. Can somebody help me drawing a pyramid structure for my organization, as I am unable to draw one in word or excel. Would appreciate your quick replies on the same. Below mentioned are the no. of employees from top to bottom for your reference.
MD
AGM - 1
S.M -1
Manager - 5
Asst. Manager - 3
Sr. Development Lead - 7
Development Lead - 11
Sr. Analyst Development - 5
Analyst Development - 10
Sr. Software Engineer - 25
Software Engineer - 9
Thanks & Regards,
Vasu

27th May 2008 From India, Hyderabad
I will get this info in a weeks time But i remeber the year. You can check in 1990 or 1991 supreme court judgements I surely will send the reference soon Siva
27th May 2008 From India, Chennai
Dear Vasu
Forget designations and salaries for a moment
Generally all organisations will have 5 major drivers
1. Strategic and leadership
2. Business Planning
3. Operational Planning
4. Managing Resources
5. Execution
Most of the organisations jobs will fall under this category
Now fit all your people in this irrespoective of their designations.
Your MD and Board will be in level 1 Strategic
Your AGM and may be be some senior people will be in Business Planning which includes palnning resouces for two to three years.
Your Managers will be in Operational planning They normally are responsible for monthy and quarterly palnning and discuss with Business planning for resources
Your Project leads are the operational managers
Execution is taken care by the last layer
Ever level can have three grades
Siva
27th May 2008 From India, Chennai
Dear Kumarn
Minimum wages is not revised once in six months.
In fact the minimum wages are fixed by the govt once and there is no ytime frame for revision
But the DA portion of the minimum wages which is linked to Cost of Living Index is revised as per the formula once in three months in Kerala and once in a year in tamilnadu.
Some States follow monthly adjustment too.
Adjustment of DA varies from State to State
Siva
27th May 2008 From India, Chennai
Hi all
I have come acroos in some posts showing calulation of minimum wages for 30 days.
Minimum wage is calculated on 26 days and not on 30 days.
I have also seen posts linking minimum wage and esi and PF
They are all different legally as of now.
PF Act does not say that we need to pay PF on minimum wages
Bonus Act does not say that we need to pay Bonus on Minimum wages
Legally these authorities can not invoke minimum wages
Having said this, let me caution that thoise who are not paying minimum wages are taking a risk if they are caught by concerned authorities.If the organisation is made to pay minimum wages with retrospective effect, then the liabilities wil be high.
Again, I must say that there is no provision to make minimum wages payable with retrospective effect.
Many organisations are managing with some of these loopholes in law
Look at various legislations in their true perspective.
Siva
27th May 2008 From India, Chennai
Hi PC3107,
You have any written rules as such the minimum wages is Rs. 3000/- in any state and we hire an employee on the salary of Rs. 4000/- then you will pay Rs. 3000/- as basic is compolsury or we can pay Rs. 2500/- as basic and rest Rs. 1500/- in HRA.
its posible or not ? what is that . the don't know about the company rules and ragulation we want only the written rules from any government authority as such if the minimum wages is Rs. 3000/- then employer are elegible to deduct the pf on whole amount or we can distribute that wages as BASIC & HRA. please clear the same.
Thanks
Manoj

27th May 2008 From India, Delhi
Hi Meenakshi,
Pls find attached the break-up of Rs 16,250 CTC. For your convenience I have derived 3 break ups with basic salary of 30%, 40% and 50%.
I would suggest to keep the basic salary as 40% of CTC if it is for a Non-Metro and 50% in case of Metro.
Regards
28th May 2008 From India, Mumbai

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Dear Friends,
Normally the Baisc percentage would be around 25 to 30 % of the CTC but at the same time ensure you are adhering to pay that the basic amount prescribed in Minimum wages. HRA will not form a part of Minimum wages
28th May 2008 From Malaysia
Hi Vasu,
Attaching here is a pyramid structure for your organization. However, it purely depends upon the role of each position to fit into the pyramid.
I tried fitting them as per my understanding of your structure, however you/your organization may choose to rework on the same.
Hope this would be of some help to you.
Dear All,
You are also requated to pls have a look at it, it provides clear description on the roles of the individuals who may fit into a particular band.
Regards
28th May 2008 From India, Mumbai

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Dear All
As per the SC Judgment in Airfreight v State of Karnataka (1995 - II - 705 SC) - it is enough that the total amount paid by the employer is more than the notified minimum wage. The law does not visualise component wise comparison.
Therefore, even if Basic and DA amount is less than what is the minimum wage, it is enough if the total wage which you are paying to the employee is more than the minimum wage.
The only problem which an employer will have (if their Basic + DA component is comparitively less when compared to the total salary) will be from the PF officials. That can be tackled if you can very well define and explain to them regarding the other allowances paid. ie the other allowances paid should not be related with a rise in cost of living so that it attracts PF Remittance. An example is food allowance
Regards
Arun
28th May 2008 From India, Kochi
HIIIIIIIIIIIIIIIIII Everyone Can any one pls tell me wht is difference between payroll and compensation Regards reshma
28th May 2008 From India, Pune
Hi resma,
The pay roll is the consolidate statement of salary of all employee at the location and all deduction and earning and take home salary show in that.
Compensation mean its payable to employee at the time of any mishapning of employee.
thanks
Manoj
28th May 2008 From India, Delhi
Dear Sir,
Thanks for correcting my mistake. I actually meant revision of D.A. in every six moths. But now most organisation not differentiate Basic and D.A. They simply mention "Basic" only which include D.A.
Thanks for your correction.
Kumaran siva
29th May 2008 From India, Delhi
Dear Arun
Refer to Manganese Ore Limited case in 1991 (Supreme Court).
It was held that Attendance Bonus is not wages. SC held that incentives do not fall under Minimum wages. In the same case it also held food concessions unless specified by the Govt in notification will not be considered for Minimum Wages
This judgement was elaborate.
I have not seen the jnudgement refered by you. So with the understanding I have on this subject based on the above judgement and a few Karnataka High Court judgement, Basic and DA alone will be taken
Siva
29th May 2008 From India, Chennai
dear all,
i seen so many response to the question of CTC and Minimum Wages. What i suggest, when you make break up of ctc try to follow:-
BASIC - According to Minimum Wages or 40-50 of C.T.C.(whatever is high)
H.R.A - Balance of Minimum Wages or maximum 50%
Conv - Balance of M.W. & H.R.A. maximum of Rs. 800/-
Medical - Balance of M.W.,H.R.A. & Conv. maximum of Rs. 1250/- p.m.
P.F. - 12% of total basic or 12% on Rs. 6500/-
ESI - 4.75% of gross if gross less than Rs. 10000/-
Bonus - 8.33% of basic or 8.33% on Rs. 3500/-
O.Allow.- Balance amount of all the above components.
If there is any canteen and bus facility that can also be included in it.
Please expect others suggestion also.
thanks
kumaran siva
29th May 2008 From India, Delhi
dear reshma,
According to me, payrole is a particular amount payable to an employee for performing a particular job for fixed hours of work (monthly or daily). But compensation is a social security provided by law for an employee to some benefit apart from his salary for any kind of loss he suffered, whether physical or financial, whether due to his mistake or not, keeping in mind the future of the employee. For eg.: compensation for accident during working or retrenchment compensation for termination of service etc.
thanks,
kumaran siva
29th May 2008 From India, Delhi
dear member, ESIC is applicable on Gross salary up Rs.10000/- only and employee contribution is 1.75% and employer contribution is 4.75%. thanks kumaran siva
30th May 2008 From India, Delhi
as per my opinion and knowledge min basic should not be less than mention in minimum wages decided by the govt pankaj
7th June 2008 From India, Mumbai
Hi Dileep,
Pls note..
Eligibility : Any employee whose Gross Salary is < or = 10,000 would fall under the ESIC Bracket.
However, ESIC gets calulated as follows :
Employees' Contribution : 1.75% of gross salary
Employer's Contribution : 4.75% of Gross Salary
Regards
10th June 2008 From India, Mumbai
Hi, As Far As I Know From The New Rules, Basic Should Be 50% Of Gross And Hra Is 40%of Basic. Ta - 800/month - Fixed, Medical - 1250/month - Fixed. Regards, Sowmya N
10th June 2008 From India, Hyderabad
Dear Ayona Gross salary must be as per minimus wages say if minimum wage of your state is 4500/- for Un skilled then we can set 1500/- as a basic
11th June 2008 From India, Mumbai
only asking questions will not build up confidence we should able to get correct answers at the right time.
12th June 2008 From India, Hyderabad
HI...
I am Thiru and I am working for p ltd companey, I would like to know about my salary break ups details,
I am getting CTC Rs.13500/-
I whould like to know what could be my basic, HRA, SP.PAY, T.A, Mgmt allowance, PF, ...
Could you suggest me on this...
Regards,
Arasu
16th June 2008 From India, Bangalore
Dear reader, Kindly let me know the Himachal Pradesh Shops and Establishment Act for leave and holidays in the State of Himachal Pradesh. Regards
5th December 2008 From India, Delhi
Dear Ayona,
You can fix the basic as Rs.4000/-
It is upon which you pay your PF.
ESI you pay it on the whole.
It has a limit set on Minimum wages Act.
So the remaining you can have it as other allowance. (Rs.1000/-)
Any how you could have graded your employees on pay. Based on it for Rs.5000/- I suppose Rs.4000 as basic and Rs.1000/- on other allowance could suffice rather than the break up you had put up.
Regards,
Ramamurthy R
5th December 2008 From India, Madras
Hi...I am a new joiner in this cite...I am working with manufacturing company in ahmedabad. I want to know about the minimum wages of labour and can any body help me to creat salary structure for the labour according to the minimum wages..
Please reply senours...:confused:
6th December 2008 From India, Ahmadabad
Hi...I am a new joiner in this cite...I am working with manufacturing company in ahmedabad. I want to know about the minimum wages of labour and can any body help me to creat salary structure for the labour according to the minimum wages..
Please reply senours...:confused:
Ashish Singal
6th December 2008 From India, Ahmadabad
Dear Mr.Shankar
Minimum basic should be 50%
HRA - 35%
Conveyance - 15%
for eg: 5000 is gross
2500 will be basic
1500 will he HRA
1000 will be conveyance
on basic 12% Rs.300 will be PF
Total CTC will be 5300/-
Ptax will be nill if the person is CTC is Rs.5000/-
This is for your information.
Regards
Bhanupriya
HR
6th December 2008 From India, Hyderabad
Dear All

Section 2(h) of the Minimum Wages Act, 1948 defines "wages" as

follows:

"Wages means all remunerations, capable of being expressed in terms of

money, which would, if the terms of the contract of employment express or

implied, were fulfilled, be payable to a person employed in respect of his

employment or of work done in such employment and includes house rent allowance

but does not include−

(i) the value of−

(a) any house−accommodation, supply of light, water, medical attendance; or

(b) any other amenity or any service excluded by general or special order

of the appropriate Government;

(ii) any contribution paid by the employer to any Pension Fund or Provident

Fund or under any scheme of social insurance;

(iii) any travelling allowances or the value of any travelling concession;

(iv) any sum paid to the person employed to defray special expenses

entailed on him by the nature of his employment; or

(v) any gratuity payable on discharge;"

Also as per the SC judgment as well as HC judgments in various states we can consider that the scheme of the Act is to provide a minimum wage for each employee and so long as that minimum wage is paid, there is compliance with the provisions of the Act. It is not the requirement of the statue that each component part of the minimum wages, such as the basic wage and the dearness allowance/special allowance should be paid at the rate prescribed under the notification. In the cases where an employer is paying a total sum which is higher than the minimum rates of wages fixed under the Act, including the cost of living index ie Variable Dearness Allowance(V.D.A.), he is not required to pay V.D.A. separately.

Therefore it should be understood that it is enough if the total sum paid to the employee is more than the minimum wages prescribed by the government. I am attaching couple of judgments - one by the hon'ble SC of India and the other by the hon'ble Mumbai HC for your reference.

Also, no law states how much percentage of Gross Salary or CTC should be BASIC Pay or Dearness Allowance. But normally it varies around 25-60% across industries.

Regards

Arun
17th November 2009 From India, Kochi

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File Type: pdf Harilal_Jechand_Doshi_Ghatkopar_..._vs_Maharashtra_General_Kamgar_Union_..._on_12_August,_1999.pdf (11.6 KB, 77 views)
File Type: doc Airfreight Case.doc (81.0 KB, 73 views)

Dear Ms Chitra, Plz let me know the new regulation as per ur posting. is it indian act or some other state. plz refer ur state acts & rule and dont misguide or confuse. Regards, Ramnath
17th November 2009 From India, Bangalore
Hi,
I am working for a Facilities Management comapny which supply Office Boys, Drivers, and other staff to different establishments. So please share the Minimum Wages Act of AP to help me in this regard.
Thanking You in advance.
Best Regards,
Sree
18th November 2009 From India, Hyderabad
Plz refer mr. arun’s posting & attachment. Very wel explained as per the rule & act. the mim wages rule difers from state to state so plz refer state rule.
18th November 2009 From India, Bangalore
Hi can you please confirm Aurangabad Maharashtra in which zone
6th June 2019 From India

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