Cite.Co is a repository of information and resources created by industry seniors and experts sharing their real world insights. Join Network
Thanks for your correct opinion.
Instead of giving additional salary by way of other allowances; typical Indian employers would try to cheat the poorest of workers of their rightful dues; by bifurcating the MINIMUM WAGES into fictitious salary heads such as HRA etc.
Serious punitive action should be taken against such employers including imprisonment, apart from fines and compensation to workers; else such blatant violation of labour welfare shall continue.
Action should be taken against not only the employer (including Occupier and factory manager), but also against the HR persons responsible for compliance and Labour Welfare Officers.
Unless some harsh action is taken; some HRs will keep on asking and seeking solutions for such illegal request as "bifurcating the minimum wages". No one is willing to think, "why Minimum Wages shoul be bifurcated further, when the competent government has FIXED it" ??
Warm regards.

From India, Delhi
Nothing has been emerged as far as the basic salary is concern in the above discussion. How the basic salary can be determind in any orgnisation ? Is there is any rulling of the Apex court that the basic should not be less than----- percentage?
I have been told by an Official of the EPF department that the bacic salary should not be less than 95% of the Minimum Wage pervailing in the state. As far as the EPF Act is concern probably it is silent on the subject.
Any body who may give their authority etc. on the matter?
L M Sharma

From India, Vijayawada
Has Official of your EPF department told you how and on what basis, it should 95%? Any tom, dick or harry tells you any thing and will you accept that?

The term Minimum Wages is a legal term in the Minimum Wages Act, 1948 and it is complete within itself. No bifurcation or break up of this amount is permissible.

It is the prerogative of the Government to fix the minimum rate of wages, as defined under Section 4 of the Minimum Wages Act, 1948; and once the Government fix such rates these cannot be bifurcated. These rate must be called and known as Minimum Wages for all purposes.

Section 4 of Minimum Wages is reproduced below:

Section 4: Minimum rate of wages.

(1) Any minimum rate of wages fixed or revised by the appropriate Government in respect of scheduled employments under section 3 may consist of*-
(i) a basic rate of wages and a special allowance at a rate to be adjusted, at such intervals and in such manner as the appropriate Government may direct, to accord as nearly as practicable with the variation in the cost of living index number applicable to such workers (hereinafter referred to as the "cost of living allowance"); or
(ii) a basic rate of wages with or without the cost of living allowance, and the cash value of the concessions in respect of supplies of essential commodities at concessional rates, where so authorized; or
(iii) an all-inclusive rate allowing for the basic rate, the cost of living allowance and the cash value of the concessions, if any.
(2) The cost of living allowance and the cash value of the concessions in respect of supplies of essential commodities at concessional rates shall be computed by the competent authority at such intervals and in accordance with such directions as may be specified or given by the appropriate Government.

From India, Chandigarh
Dear Surendera

I agree with you in totality on this;
" The term Minimum Wages is a legal term in the Minimum Wages Act, 1948 and it is complete within itself. No bifurcation or break up of this amount is permissible. "

What one fails to understand is the obsession that certain companies and their HR have with; bifurcating even this minimum wages further.

It is saddening to read about these companies and one feels sorry for the plight of poor workers.

Can such companies be called "progressive and good" or "exploiters of labour and penny-pinchers" ??

If they are so obsessed with a "salary strucuture" (?); why can't they have their Basic Pay STARTING MUCH HIGHER than the absolute) MINIMUM prescribed by the Govt. ??

The standing and the standard of a company can be known immediately from the MINIMUM BASIC PAY that they pay to their LOWEST-LEVEL of workers.

What to say, if it is even LOWER THAN THE MINIMUM WAGES !!

I think it is either an insult or compulsion to work in such a company. I hope HR professionals will keep this fact in mind, when talking or boasting of their companies.

When I joined a giant manufacturing company as Management Trainee, at the beginning of my career; during our Training in HRM, we were told to omit studying the Minimum Wages Act 1948 - because its not applicable !! The company pays much MUCH HIGHER SALARY AND BENEFITS to its lowest level of worker than what is prescribed as the Minimum Wages in the Act.

It is simply outrageous and disgusting to note that in Companies and the "Organised sectors" the workers get less BASIC PAY than the Minimum Wages prescribed - thanks to our own "creative" HR Professionals (or HR non-Professionals) who instead of guiding the Management with their professional advice, do things expected from people with no dignity and professional pride !!

Warm regards.

From India, Delhi
Minimum wages i.e Basic + D.A. are fixed by the respective State Govt. D.A. is veriable and change every six month. On the total of Basic + D.A. , 5% HRA needs to be paid. So Basic+DA+ HRA these are main direct components of MW . Apart from this indirecte components are PF, ESI, Bonus, Leave. etc. Employer has to pay this much MW.
Hemant Nadgauda

From India, Pune
The minimum wages fixed by the concerned state Government are inclusive of DA and there is no statutory law that you are supposed to pay DA. However, you should not pay less then what minimum wages has been fixed by the State Government. AS I had myself come with the same problem in the past.
From India, Jaipur
I agree with Madhu, law is not clear as to how much you would want to keep the DA and basic component. Most places i have seen around has a typical break up of Basic*DA*HRA however as a best practice its advisable to keep the minimum wages intact (BASIC & DA) and well you could provide PF benefits on them. By the way there is one whole set of litigation (the group 4 security vs dept of pf) in process pertaining to the bifurcation inititated by the PF department which is suggesting that the PF amount be paid on the minimum wages.
From United States, San Francisco
Law is very clear as long as the minimum rate of wages is concerned. The Rate of Minimum Wages is a lumpsum amount and cannot be bifurcated.
From India, Chandigarh
Dear Mr. Bhanot, please refer to the definition of wages under the minimum wages act 1948 which mentions HRA that also could be a part of Minimum wages. Nowhere its written that minimum wages can be bifurcated or not bifurcated. You are also requested to refer the supreme court ruling in Bridge & Roofs co. ltd vs union of india holding that the basic wage for PF contribution comprise of basic + DA and not house rent allowance. Your comments are welcome in this regard if you have any new information in this regard. The above information was intended to provide an idea as to how confusing the whole scenario is. Though I still maintain the PF benefits need to be given on minimum wages (The group 4 securitas case has been reverted back to the PF tribunal). A judgement is awaited.
Meanwhile notices have been issued by some of the DLCs to ensure that the minimum wages are not to be split.

From United States, San Francisco
Dear Senior
as per epfo encforcement office basic should be 60% including (basic +Da) but he din't give me any notification so if there is any notification please send me.

From India, Delhi

This discussion thread is closed. If you want to continue this discussion or have a follow up question, please post it on the network.
Add the url of this thread if you want to cite this discussion.

About Us Advertise Contact Us
Privacy Policy Disclaimer Terms Of Service

All rights reserved @ 2020 Cite.Co™