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Dear All

I have come across an interesting situation as follows:

Our employees are permanent employees employed for a specific monthly salary. On the pay slip it is shown that the employee has worked for 26 days and 4 week offs. The Labour Inspector is saying that we cannot divide the salary of employee by 30 days and it need to be divided by 26 days. The logic he is giving is as per law, after working for 6 days the employee is entitled for 1 day week off and hence we cannot claim that we are paying for the employees week off day also. If I divide the monthly salary by 26 days then daily rate of wages go high. What is your opinion???

From India, Mumbai

I have come across an interesting situation as follows:

Our employees are permanent employees employed for a specific monthly salary. On the pay slip it is shown that the employee has worked for 26 days and 4 week offs. The Labour Inspector is saying that we cannot divide the salary of employee by 30 days and it need to be divided by 26 days. The logic he is giving is as per law, after working for 6 days the employee is entitled for 1 day week off and hence we cannot claim that we are paying for the employees week off day also. If I divide the monthly salary by 26 days then daily rate of wages go high. What is your opinion???

From India, Mumbai

Dear Manish,

Its an interesting topic to be discuss; I hv worked in many industries but every where d rule is to divide the monthly salary wid 30 days not 26 days. As per labour law its true that working for 6 days, the employee is entitled for 1 day week off but its paid hoilday. Yes but if you pay salary on daily wages basis you have to show salary of 26 days. As per my view if employees is getting specifed monthly salary thr is no such rule but if its on daily wages thn it is calculated on 26days in a month. I think this topic already has been discussed in this form. Its good that we discuss such type of issue in this forum caz I think every HR has smwhr in thr career time came across wid such sitution.

Best Regards

From India, Surat

Its an interesting topic to be discuss; I hv worked in many industries but every where d rule is to divide the monthly salary wid 30 days not 26 days. As per labour law its true that working for 6 days, the employee is entitled for 1 day week off but its paid hoilday. Yes but if you pay salary on daily wages basis you have to show salary of 26 days. As per my view if employees is getting specifed monthly salary thr is no such rule but if its on daily wages thn it is calculated on 26days in a month. I think this topic already has been discussed in this form. Its good that we discuss such type of issue in this forum caz I think every HR has smwhr in thr career time came across wid such sitution.

Best Regards

From India, Surat

well what i have studied and wht’s been implemented in my organisation is that the salary is to be calculated from working days after leaving off-days.

From India, Chandigarh

From India, Chandigarh

Dear Manish

Monthly salary to be divided by 30/26 is really confusing. This one is vary organization to organization. But I think if you pay more than as legal requirement then there is no problem.In our orgs. we calculate OT/Gratuity by dividing 26days, otherwise 30days.

For example one employee monthly salary/wage is 6000/-per month and in any month(30days) he worked 15days and avail 2 leave with wage and 4 w/off then total pay days is 21days. Now we calculate their salary by dividing 30days

paid salary=6000-(6000/30)*(30-21)=6000-200*9=6000-1800=4200

Now dividing by 26 days

paid salary=6000-(6000/26)*(26-17)=6000-230.76*9=6000-2077=3923

I think 4200>3929 off-course this is beneficial for employee.

Thanks

Manish

From India, Bangalore

Monthly salary to be divided by 30/26 is really confusing. This one is vary organization to organization. But I think if you pay more than as legal requirement then there is no problem.In our orgs. we calculate OT/Gratuity by dividing 26days, otherwise 30days.

For example one employee monthly salary/wage is 6000/-per month and in any month(30days) he worked 15days and avail 2 leave with wage and 4 w/off then total pay days is 21days. Now we calculate their salary by dividing 30days

paid salary=6000-(6000/30)*(30-21)=6000-200*9=6000-1800=4200

Now dividing by 26 days

paid salary=6000-(6000/26)*(26-17)=6000-230.76*9=6000-2077=3923

I think 4200>3929 off-course this is beneficial for employee.

Thanks

Manish

From India, Bangalore

It is common that for deciding daily wage the monthly wage is divided by 30 irrespective of whether the month has 30, 31 or 28 days. However, for calculating gratuity, it is to be divided by 26 only. Similarly, for finding out the retrenchment compensation as per Industrial Disputes Act, the salary is to be divided by 30.

Regards,

Madhu.T.K

From India, Kannur

Regards,

Madhu.T.K

From India, Kannur

Dear Manish,

Greetings for the day,

Yes labour inspector is right monthly salary should be divided by 26 instead of 30, 31, 28 or 29 take the example of minimum wage of any state you will find the avarage daily wage is calculated by basic+da/26 instead of 30, 31, 28 or 29 days.

thanks & regards,

From,

sumit kumar saxena,

9899669071, 0120-4131277

From India, Ghaziabad

Greetings for the day,

Yes labour inspector is right monthly salary should be divided by 26 instead of 30, 31, 28 or 29 take the example of minimum wage of any state you will find the avarage daily wage is calculated by basic+da/26 instead of 30, 31, 28 or 29 days.

thanks & regards,

From,

sumit kumar saxena,

9899669071, 0120-4131277

From India, Ghaziabad

Dear all

How to calculate the daily wage will differ from establishment to establishments depending upon the law applicable to it, namely whether it is the Factories Act or the Shops and Establishments Act or the Mines Act or the Planatation Labour Act or the Motor Transport Workers Act. The only exception to this rule is the Payment of Gratuituy Act where it is provided that the monthly wage should be divided by 26 to obtain the daily wage. Take for example the Factories Act. This Act says that that first day of the week shall be a holiday for the worker, that is in other words, the worker should have a weekly off day. But the Factories Act does not say that the weekly off should be a paid weekly off. Therefore, if the employer wants to calculate the daily wages he has to divide the monthly wage by 26. If the Tamilnadu Shops and Establishments Act is considered, this Act says that every shop or establishment should be closed for a day in a week and also says that no deduction should be made from the wages of every employed person in a shop/establishment on account of any day or part of a day on which a holiday had been allowed under the Act. This simply means that in the case of a monthly paid employee in a shop or establishment to arrive at his daily wage, his monthly wage should be divided by 30/31 and in the case of a daily paid employee he should be paid for the days on which the shop remains closed. The provisions of the Plantation Labour Act is similar to the Factories Act. This Act provides for a rest day in every period of seven days to all workers but does not say that the worker should be paid wages for the rest day. In the case of Factories and Plantation what sometimes happens is that whenever long term agreements are reached, these agreements may provide a weekly off with wages. In such cases, to arrive at the daily wage the monthly wage has to be divided by 30. Even in this case for calculating gratuity under the Payment of Gratuity Act the monthly wage has to be divided by 26 to arrive at the daily wage. In cases where the Government fixes minimum wages for any schedule employment under the Minimum Wages Act and if notification specifically provides that wages have to be paid for weekly holidays also, then to arrive at the daily wage the monthly wage has to be divided by 30. The retrenchment compensation payable under the Industrial Disputes Act is equal to "fifteen days average pay for every completed year of continuous service-------in excess of six months" The term "average pay" is defined under section 2(aaa). Based on this definition the "average pay" has to be calculated and based on this calculation the retrenchment compensation is to be computed.

With regards

From India, Madras

How to calculate the daily wage will differ from establishment to establishments depending upon the law applicable to it, namely whether it is the Factories Act or the Shops and Establishments Act or the Mines Act or the Planatation Labour Act or the Motor Transport Workers Act. The only exception to this rule is the Payment of Gratuituy Act where it is provided that the monthly wage should be divided by 26 to obtain the daily wage. Take for example the Factories Act. This Act says that that first day of the week shall be a holiday for the worker, that is in other words, the worker should have a weekly off day. But the Factories Act does not say that the weekly off should be a paid weekly off. Therefore, if the employer wants to calculate the daily wages he has to divide the monthly wage by 26. If the Tamilnadu Shops and Establishments Act is considered, this Act says that every shop or establishment should be closed for a day in a week and also says that no deduction should be made from the wages of every employed person in a shop/establishment on account of any day or part of a day on which a holiday had been allowed under the Act. This simply means that in the case of a monthly paid employee in a shop or establishment to arrive at his daily wage, his monthly wage should be divided by 30/31 and in the case of a daily paid employee he should be paid for the days on which the shop remains closed. The provisions of the Plantation Labour Act is similar to the Factories Act. This Act provides for a rest day in every period of seven days to all workers but does not say that the worker should be paid wages for the rest day. In the case of Factories and Plantation what sometimes happens is that whenever long term agreements are reached, these agreements may provide a weekly off with wages. In such cases, to arrive at the daily wage the monthly wage has to be divided by 30. Even in this case for calculating gratuity under the Payment of Gratuity Act the monthly wage has to be divided by 26 to arrive at the daily wage. In cases where the Government fixes minimum wages for any schedule employment under the Minimum Wages Act and if notification specifically provides that wages have to be paid for weekly holidays also, then to arrive at the daily wage the monthly wage has to be divided by 30. The retrenchment compensation payable under the Industrial Disputes Act is equal to "fifteen days average pay for every completed year of continuous service-------in excess of six months" The term "average pay" is defined under section 2(aaa). Based on this definition the "average pay" has to be calculated and based on this calculation the retrenchment compensation is to be computed.

With regards

From India, Madras

I totally agree with V.harikrishnan sir With regards sarvesh shukla HR Executive Sodexo india

From India, Gurgaon

From India, Gurgaon

Dear Manish & others, Are you paying as per Minimum Wages notified. In that case the monthly wages is a multiple of 26, indeed everyday's wages is the wage for 1&1/6 day's wages so that at the end of the sixth day the wages of 7 days are made up. So you don't have to pay for the weekly off day. In fact if you divide the monthly min. wages by 26 you will get the daily wage rate. But in other cases where you pay an amount higher than minimum wages the daily wages could be computed by dividing by the number of working days in that month. For example if someone is absent for 5 days without pay, the deduction would monthly wages divided by the number of days in the wage month multiplied by 5, the number of days of absence. Harikrishnan has already elaborated on the other aspects. Regards KK

From India, Bhopal

From India, Bhopal

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