Industrial Relations
Hr Generalist With 8+ Years Exp. Good In
Korgaonkar K A
Manager- Hr & Admin
Human Resource Manager
+3 Others

Dear All,
The Case is - my company is auto compo.manufa. in Pune. We have some contractual workers in the company out of which few are sincere & hard working..But our mgmt not willing to take them on roll. In this case to retain such workers , Can we give the wages more than minimum wages e.g. if as per Min. wage act it is suppose Rs.5000 pm & now in above case, can we give Rs. 7000 or more to the contractual workers?
& If yes, What would be the max. limit of wages. ?
Please provide the solution or views.
Ganesh Kadam
13th June 2013 From India, Pune
Dear Member
Off course you can pay more than Minimum wages but do take this path very cautiously as you may get caught in the provisions of equal remuneration act which clearly states equal pay for equal work and it is very difficult to prove hard work and sincerity. Secondly by giving different salaries you would be creating grounds for unionisation by spreading discontent in the workers. Also look at long term, with the increase in minimum wages the overall liability of the company will also increase.
Better ask the contractor to provide them with an award or something ,such as a cash award of Rs. 10000/- , by which you can appreciate their contribution without creating any precedence and keeping the company costs also in check.
Preetam Deshpande
13th June 2013 From India, Mumbai
Dear Ganesh ji,
You can pay more than minimum. No one will ask you why you paid more. But you can not pay less than minimum. If you pay less than minimum, definitely you will be asked.
There is no upper limit. But whatever you pay, should be justifiable.
13th June 2013 From India, Mumbai
Respected Ganesh Kadam Law always speaks about minimum thing which you and org has to do. maximum is your limit ... there is no MAX limit .......
13th June 2013 From India, Hyderabad
Dear Ganesh, In order the keep the fixed head count low it is apt for the orgn to not absorb them. And yet, it does not stop you to pay them above the minimum wages act. You may want to look at the past trend in terms of how their increment has typically been.. 5-8% every year or what? This may give you a feel of how you may want to place them now.
Also, it means that there may be existing staff who are senior in terms of tenure (and are on your payroll) yet due average performance their salary has not moved up so high. You may want to factor that the rise you give year on year to both such staff may after a couple of years be such that the contract staff ends up getting equal/more than inhouse staff.
13th June 2013 From India, Mumbai
You can pay anything above than the minimum wages but you cannot pay lower than whatever prescribed therefore it is called minimum wages Act
13th June 2013 From India, Mumbai
Dear Preetam ji,
I fully agree with you.
Equal Remuneration Act is of BABA AADAM jamana. This Act is out dated today. We should make representation to Govt. to discard it.
Form D register under it, if not maintained then there is a fine of 25k. Enforcing Officers also do not know how to maintain it. They want you to make it back & white.
It is a good suggestion.
13th June 2013 From India, Mumbai
Dear Ganesh ji, It is not your prerogative to increase the wages of contract labour. Hope you understand what I mean to say.
13th June 2013 From India, Mumbai
Dear Preetam ji,
In my company, to avoid the unhappy or imbalance situation about wages, I have kept the performance of the worker in certain categories which is communicated with all CONTRACTUAL ASSOCIATES,. But the point you raised about increase in min. wages, increases overall liability is also valid & I'll definitely think on it. Also the cash Award is good idea. But need to check with Sr. Mgmt.
Thanks for suggestions.
14th June 2013 From India, Pune
Dear Pankaj ji,
Thanks for sharing your views, but I was talking about only the SHOP FLOOR-CONTRACTUAL LABORS which comes under Min. Wage Act not about any staff or white collar employees.
14th June 2013 From India, Pune
You can give the sincere and hard working workmen with incentives / productivity bonus for every month for which you must maintain the productivity of each workmen. Even you can pay as per the quality products delivered by the workmen, for which no one can ask any question. But take prior approval from your management before effecting the payment. This payment you need not to give through the contractor or his bill. You can directly make the payment (Cash Reward) to the workmen in monthly progress /quality / safety meeting in front of all the employees.
14th June 2013 From India, Kumbakonam
Dear Ganesh, I have know setup where the contract workers because of overtime and long working hours have got very close or sometime got more than what a white collar junior level staff gets. hence this was highlighted.. trust you would factor that.
Like S Bhaskar says,... one more option to look at is paying early salary to good performers.. say the top 10% of the performers will get salary 2-3 days in advance. i.e if salary chq gets paid to contractor on 7th... For the top 10% staff issue cheq to contractor on 1st... and for remaining 90% on the usual date. There is no extra payment from your end.. just early payment... there is not revenue loss to you.. yet for the staff one week early salary means a lot. Also, you are not penalizing the 90% for not being top performers.
Something else that can be done is .. for someone who is 100% attendance.. give that person one day extra salary... generally contract staff have habit of bunking.
Best Wishes
14th June 2013 From India, Mumbai
Dear Ganesh
May find it useful to go through following points:
# It is not YOU (management) it is the CONTRACTOR who pays the wages to contract labours
# As said above, you can definitely pay higher, in fact it is the practice since there are several critical skills and high skills which demads higher than the minimum- it is market driven. The contractor can pay/reward the performing labours.
# There is no upper limit - it calls for review of salary of the employee at bottom of your organization and any possible implications on regular workmen/their unions.
Shailesh Parikh
Vadodara, Gujarat
99 98 97 10 65
15th June 2013 From India, Mumbai
Yes you pay as you desire but if you want that no unrest among the workers who are still working , you may please give promotion or grade to whom you want to increase their minimum wage ie Grade I, Grade Ii ,Technician
22nd June 2013 From India, Ghaziabad
Contractor collected pf amount from the workers, but it is not deposited. He got PF registration, but no payments. Can we register a embezzlement case in Police Station. Pl. clarify.
23rd June 2013 From India, Nellore
Dear sambasivakamasani,
This is the common can lodge the case against contractor but procedure will go long..Also consider the other circumstances like contractor status, management's view etc..
Better way.. take care in future..
27th June 2013 From India, Pune
Dear Sambasiva,
As per Contract Labour Act, if the contractor is not making payments properly, then principal employer is liable to pay and deduct the amount thus paid in contractor's bills. It is the responsibility of the principal employer to take care of such issues. Whatever amount is paid to contractor towards wages includes statutory components like PF, ESI, etc. You may take up the issue with local Labour Department authorities for resolving the issue, with all records substantiating your argument. In cases of contravention, the principal employer will be fined and jailed.
With regards,
27th June 2013 From India, Vijayawada
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