Raj Kumar Hansdah
Shrm, Od, Hrd, Pms
+1 Other

Dear Seniors,
I need some clarity regarding minimum wages.
1) Is minimum wages stands for only BASIC+DA?
Say Minimum wages for Skilled is Rs. 5000 & our company pays to skilled staff as follows :
BASIC+DA - 4000/-
Mobile Allowance - 1000/-
Total figure comes equivalent to minimum wages i.e. Rs.5000/- is it ok as per the labour law or should I revise it.
waiting for your valuable guidance.
Best Regards,

From India, New Delhi
Pl read the defination of minmum wages in Minimum wages Act 1948. It contains two parts (i) &(ii). Try to understand (ii) an if you are convinced pl. revert.
From India, Nagpur
Hi, Whatever be the breakdown, the total amount should be more than the min wages. Then it is okay.
From India, Delhi
Dear amodsemilo

Please see some earlier threads too, on this topic.

Certain companies have been trying to devise illegal means of depriving the poorest section of workers (who earn the minimum wages); by REDUCING their basic pay and INTRODUCING some 'fictitious' or 'dubious' heads of salary; so that they are DEPRIVED of the statutory benefits that are BASED on Basic Pay, such as P.F., E.S.I. or other compensation.

Tell me, you are reducing their basic pay in the name of MOBILE ALLOWANCE. Is there really any need of Mobile phone for a worker who is earning Minimum Wages ??

If it is necessary, why not give Mobile allowance, OVER & ABOVE the Minimum Wages ??

If such practices go on unchecked, one wonders whether some day, the poor workers will get only Rs. 1 as their basic Pay and rest of the amount will be shown as some or other 'fictitious' and sham allowances.

As a conscientious and enlightened HR, don't you think it is a way of exploiting the poorest of the poor workers ??
I wonder how the value system of such companies and their HR's function.

Warm regards.

From India, Delhi
Dear Amod,

The Minimum Wages act is enacted by the respective State Goverments and from time to time (normally 5 years) it is amended after due consultations.

The Minimum Wages act will clearly define two aspects Basic Wages and the Dearness Allowance payable in the industry and there will be no ambiguity. The employer is required to abide by the stipulations laid down.

The Dearness Allowance is generally linked to the Cost of Living Index and the base year is clearly specified. The amount payable for every point over and above an index will be explicitly mentioned.

The monthly wages for the purpose of Minimum Wages Act is considered for 26 days. The basis for arriving at 26 as indicated to me by my senior is (365 days - 52 weekly offs - 9 National and Festival Holidays = 304/12 = 25.33 rounded off to 26 days).

You can obtain a copy of the Minimum Wages applicable to your industry from the Labour office. If you are in Tamilnadu you can subscrible to a monthly journal "UZHAIPAVAR ULAGAM" on payment of an annual subscription of Rs.80/- or Life time subscription of Rs.750/- (20 years). But the fact is it will be published in Tamil.

If you are in a different state I am sure that such initiatives will be available in the respective labour offices.

This book will give you updates on the recent amendments in Minimum Wages and also a summary of the Cost of Living Indices for a specified period. It also gives you updates on leading judgements and queries raised by members.

Trust this will be useful to you


From India, Madras
Dear kannanmv
Thanks for your contribution.
However, the following needs to be corrected :
correctedOnly in Payment of Gratuity Act, for the purpose of arriving at daily wages/salary (then to multiply it with 15 to get 15 days salary; rather than dividing the monthly salary by 2); the 26 days formula has been proposed.
Please note that it is not applicable elsewhere to the detriment to workers salary.
Moreover, also note that a worker working continuously is eligible for a paid weekly off.
Warm regards.

From India, Delhi
Dear Rajkumar
In Tamilnadu I understand that, to arrive at one day wage the wages are divided by 26.
The recent amendment GO (2D) dated 23.07.2009 applicable to workers engaged in serving in Motor vehicles for Public transport published in "Uzahipavar Ulagam" issue for September 2010 Pages 20-22 number can be referred.
This issue will be in Tamil but the relevant copy in English can be obtained from Labour department..
I request you to kindly correct me if my understanding of the article is wrong.
Awaiting your response.

From India, Madras
Dear Kannan

I sincerely appreciate your interest in the issue and the pains you are willing to go through to clarify certain issues.

Both of us stand corrected to some extent. Let me explain the significance of 26 days, the basic concept of which you have already explained and is widely accepted as :

the exclusion of Weekly Off in a month (4 or 5); making the working days as 26.

Another way of looking at this is: 365-(52 weekly Off)/12 0r, (313)/12 comes to 26 days.

Therefore, by virtue of working for 26 days in a month (the weekly off's being already included in a month); an employee gets the full salary for a month. So to arrive at a day's worth of work; the monthly salary should (rightly be) be divided by 26 only.

Some unscrupulous employer do try to reduce the quantum of per diem salary by dividing the monthly salary by 30. To avoid such manipulation; the law, under Payment of Gratuity Act devised a way to define the 15 days salary; not as half months salary but to arrive at per diem salary (by dividing monthly salary by 26) and then multiplying it by 15.

Now, there are TWO ways, in which Minimum wages are published in the government notifications : per diem wages and monthly wages.

Here, I agree with you; you have rightly pointed out that the monthly wages should be divided by 26 to arrive at per day wages (wherever the wages are given as monthly).

Hope this rests all doubts on the issue.

Warm regards.

From India, Delhi
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