Dear Sir,
I have many employee who recieve basic less than minimum wages aplicable in our state but there gross is higher than the minimumj wages. So I want to know if Minimum wages only enclude the basic salary/wages or the total gross amount should be equal to or more than the minimum wages. for example an employee(Semi Skilled-A) have following structure.
Basic-4500 (Less than Minimum wages i.e, 4977.17 in Haryana)
HRA- 1800
Conveyance allownace-360
Compesatory allownace-72
Total Gross= 6732
We pay 6732-(12%PF)-(1.75% ESI)= Net Pay
I want to know if we will have to revise the salary of all and pay off the arrear or this is correct and no need to revise. I would appreciate if some Act or proof is is quoted with answer so that I can satisfy the management.
Thank you
From India
3I have many employee who recieve basic less than minimum wages aplicable in our state but there gross is higher than the minimumj wages. So I want to know if Minimum wages only enclude the basic salary/wages or the total gross amount should be equal to or more than the minimum wages. for example an employee(Semi Skilled-A) have following structure.
Basic-4500 (Less than Minimum wages i.e, 4977.17 in Haryana)
HRA- 1800
Conveyance allownace-360
Compesatory allownace-72
Total Gross= 6732
We pay 6732-(12%PF)-(1.75% ESI)= Net Pay
I want to know if we will have to revise the salary of all and pay off the arrear or this is correct and no need to revise. I would appreciate if some Act or proof is is quoted with answer so that I can satisfy the management.
Thank you
From India
Dear Mr.Mohd.Arshad Barkaati
In the following case CASE NO.: Appeal (civil) 4259 of 1999 PETITIONER: AIRFREIGHT LTD.
RESPONDENT: TATE OF KARNATAKA AND ORS. DATE OF JUDGMENT: 04/08/1999 BENCH: D.P. WADHWA & M.B. SHAH
reported in 1999 Supp. (1) SCR 22 it was held by the Honourable Supreme Court as follows:
it is held that:-
"(1) The appellant-company would be covered by the expression "shops" and/or "commercial establishment" as it is carrying out various systematic commercial activities with profit motive and also it sells services on
retail basis.
(2) The Notification issued under the Act prescribing minimum wages applies to all kinds of shops and commercial establishments - big or small - and that payment of more than prescribed minimum rates of wages is not relevant for deciding its applicability. It cannot be stated that as they are paying more than the prescribed minimum wages, the Act or the Notification would not be applicable. For determining whether they are paying minimum rates of wages or not, the amount paid for the value of items which are excluded under Section 2(h) of the Act is not to be taken
into consideration.
(3) Minimum rate of wages fixed under the Act is remuneration payable to the worker as one package of fixed amount. In cases where minimum wage is linked with the cost of living index, the amount paid on the basis of dearness allowance is not to be taken as an independent component of the minimum wages but as part and parcel of the process of computing the rates of minimum wages which is to be determined after taking into consideration
the cost of various necessities. "
You can access this judgment in the website of the Honourable Supreme Court of India.
This judgment clarifies the issues raised by you.
With regards
From India, Madras
In the following case CASE NO.: Appeal (civil) 4259 of 1999 PETITIONER: AIRFREIGHT LTD.
RESPONDENT: TATE OF KARNATAKA AND ORS. DATE OF JUDGMENT: 04/08/1999 BENCH: D.P. WADHWA & M.B. SHAH
reported in 1999 Supp. (1) SCR 22 it was held by the Honourable Supreme Court as follows:
it is held that:-
"(1) The appellant-company would be covered by the expression "shops" and/or "commercial establishment" as it is carrying out various systematic commercial activities with profit motive and also it sells services on
retail basis.
(2) The Notification issued under the Act prescribing minimum wages applies to all kinds of shops and commercial establishments - big or small - and that payment of more than prescribed minimum rates of wages is not relevant for deciding its applicability. It cannot be stated that as they are paying more than the prescribed minimum wages, the Act or the Notification would not be applicable. For determining whether they are paying minimum rates of wages or not, the amount paid for the value of items which are excluded under Section 2(h) of the Act is not to be taken
into consideration.
(3) Minimum rate of wages fixed under the Act is remuneration payable to the worker as one package of fixed amount. In cases where minimum wage is linked with the cost of living index, the amount paid on the basis of dearness allowance is not to be taken as an independent component of the minimum wages but as part and parcel of the process of computing the rates of minimum wages which is to be determined after taking into consideration
the cost of various necessities. "
You can access this judgment in the website of the Honourable Supreme Court of India.
This judgment clarifies the issues raised by you.
With regards
From India, Madras
Dear Mr.Mohd.Arshad Barkaati
Please see the definition of the term "wages" as defined in section in section 2(h) of the Minimum Wages Act. The section 2(h)(i), 2(h)(ii), 2(h)(iii), 2(h)(iv) and 2(h)(v) definition states that the following are not included in the definition of the term "wages". They are
section 2(h)(i):- value of any house accommodation supply of light water medical attendance and any other amenity excluded by the Government from the definition of wages.
section 2(h)(ii):-contribution paid by the employer to any pension fund or provident fund or any scheme of social insurance.
section 2(h)(iii):-travelling allowance or travelling concession
section 2(h)(iv):- any sum paid to the employee to defray special expenses because of the nature of his employment.One example of this is the "batta" paid to drivers of buses or taxis or tourist taxis.
section 2(h)(v):- gratuity.
According to section 2(h) house rent allowance is included in the definition of the term "wages"
Now according to your post you pay the following
Basic-4500 (Less than Minimum wages i.e, 4977.17 in Haryana)
HRA- 1800
Conveyance allownace-360
Compesatory allownace-72
Total Gross= 6732
The minimum wages fixed according to you is Rs.4977.17.
To decided whether you are paying minimum wages as fixed by the Government from out of the various components of your salary structure, those components which are included in the definition of the term "wages" in section 2(h) has to be added. They are
Basic Rs.4500 + House rent allowance Rs.1800 =Rs.6300.
Conveyance allowance and compensatory allowance cannot be included because they are not included in the definition of wages as defined in the first part of section 2(h). Rs6300 is more than the minimum wages notified. Therefore there is no need to revise the salary for complying with the minimum wages notification.
I have assumed that Rs.4977.12 is inclusive of the dearness allowance if any notified by the Government.
With regards
From India, Madras
Please see the definition of the term "wages" as defined in section in section 2(h) of the Minimum Wages Act. The section 2(h)(i), 2(h)(ii), 2(h)(iii), 2(h)(iv) and 2(h)(v) definition states that the following are not included in the definition of the term "wages". They are
section 2(h)(i):- value of any house accommodation supply of light water medical attendance and any other amenity excluded by the Government from the definition of wages.
section 2(h)(ii):-contribution paid by the employer to any pension fund or provident fund or any scheme of social insurance.
section 2(h)(iii):-travelling allowance or travelling concession
section 2(h)(iv):- any sum paid to the employee to defray special expenses because of the nature of his employment.One example of this is the "batta" paid to drivers of buses or taxis or tourist taxis.
section 2(h)(v):- gratuity.
According to section 2(h) house rent allowance is included in the definition of the term "wages"
Now according to your post you pay the following
Basic-4500 (Less than Minimum wages i.e, 4977.17 in Haryana)
HRA- 1800
Conveyance allownace-360
Compesatory allownace-72
Total Gross= 6732
The minimum wages fixed according to you is Rs.4977.17.
To decided whether you are paying minimum wages as fixed by the Government from out of the various components of your salary structure, those components which are included in the definition of the term "wages" in section 2(h) has to be added. They are
Basic Rs.4500 + House rent allowance Rs.1800 =Rs.6300.
Conveyance allowance and compensatory allowance cannot be included because they are not included in the definition of wages as defined in the first part of section 2(h). Rs6300 is more than the minimum wages notified. Therefore there is no need to revise the salary for complying with the minimum wages notification.
I have assumed that Rs.4977.12 is inclusive of the dearness allowance if any notified by the Government.
With regards
From India, Madras
Dear Mr.Mohd Arshad Barkaati
As a clarification to my last post in this thread I am posting this thread.
In case the Government has notified that dearness allowance should be paid in addition to the basic pay and had also indicated the amount to be paid as dearness allowance then please add up the basic pay notified by the Government and the dearness allowance notified by the Government. Let this be called "A". Now add up the basic pay paid by you and the house rent allowance paid by you. Let this be called "B".
If "B" is equal to or more than "A" then there is no need to revise the salary structure.
If "B" is less than "A" then "B" has to be increased to the level of "A".
With regards
From India, Madras
As a clarification to my last post in this thread I am posting this thread.
In case the Government has notified that dearness allowance should be paid in addition to the basic pay and had also indicated the amount to be paid as dearness allowance then please add up the basic pay notified by the Government and the dearness allowance notified by the Government. Let this be called "A". Now add up the basic pay paid by you and the house rent allowance paid by you. Let this be called "B".
If "B" is equal to or more than "A" then there is no need to revise the salary structure.
If "B" is less than "A" then "B" has to be increased to the level of "A".
With regards
From India, Madras
Dear Mr. Harikrishnan, Pls let me kknow if a delhi based company has posted employee in other state the min wages of delhi or other state will be applicable???
From India, New Delhi
From India, New Delhi
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
