Human Resources Management
Asstt. Manager-hr
Hr Professional
Raj Meritech
Executive (hr & Admn.)
Senior Excecutive- Hr &admin
Sunita Sarkar
Hr / Personnel Deptt.
Company Secretary & Lawyer

Thread Started by #Sunita Sarkar

Can we break the minimum wage as salary part like HRA, Conv. etc or we have to fix this amount into basic only, pls suggest.
27th September 2007 From India, Gurgaon
Dear Sunita,
We cant break the Minimum wages of Labour class, because Basic wages is the Minimum Wages. Some employer bifurcate the minimum wages but they are doing wrong. There are some conditions for deposit of ESIC and EPF these are
1)ESIC will be deposit on full minimum wages (No bifurcation).
2)PF minimum pf should be deposit (12%) Rs. 234/- that will come on Rs. 1950/-. So i think we cant bifurcate Minimum wages.
27th September 2007 From India, Gurgaon
Dear Sunita,
I agree with Mr. Raj.
However I see one possibility. ESI and PF contribution should be made on the entire minimum wages prescribed by the governament. If you are making this payment on the prescribed sum then you may call the same sum by whatever name of your liking. There will be no violation of law. My impression is that you are trying to get a milage out of the same sum.
One thing we need to keep in mind. The minimum wages as prescribed by various state governments are really minimum. Today if you see the price levels for the essential commodities, it is just horrifying. Yes, companies do have their own problems, but in one way or the other we should try to keep the salary levels to the extent possible higher than the minimum wages prescribed - or to put the same differently - salaries should be put at that minimum which covers at least essentials of life in a particular category of workmen.
What do you feel?
27th September 2007 From India, Bangalore
From minimum wage you can give break up as HRA,CON& other ALLOW,but ones you fix basic from which PF amount has to be deducted and fro Gross ESI has to be deducted,form wages 40% of basic has to be fixed.
28th September 2007 From India, Madras
Dear Sunita,

As per the Minimum Wages Act - 1948. The definition of wage under sec. 2(h) of the Act is, All remuneration capable of being expressed in terms of money, which would be payable to a person employed in respect of his employment and includes HRA.

therefore, Minimum Wages means all remuneration expressible in terms of money and payable to an employee including HRA but excluding value of house accommodation, suply of light water,pf contribution travelling allowance,and reimbursement gratuity .

Note if commission on turnover is being paid as per terms & condition of employment then it will be a part of Minimum Wages.


Minimum Wages = BASIC + HRA + Commission (as per term & Condition of employment and payable monthly).

Now i think it is clear that the minimum wages may be bifurcated in three componet Basic, HRA,Commission . Generally companies not paid commission therefore it may be limited to two parts i.e. Basic + HRA

As far as ESI and EPF Acts are concerned No where in the definition of Wages in these Acts minimum wages has been taken in to consideration for paying contribution.

E.S.I. is all right paid on gross salary but the wages for P.F. contribution is limited to Basic or Basic+DA, therefore one can bifurcate Minimum wages in two Parts as Basic and HRA with reasonable % of Basic.

this is what i have understood from my study of Acts case laws and practice in HR Deptt.

further i would highlight that there is nothing given in the E.P.F. Act regarding the p.f. contribution to be paid on minimum wages. even the term of minimum wages is not used in the definition of wages in the pf act.

Actually these are the contractor who have started the practice of cotributing p.f. on min. wages (for there own benefit ???)


Mohd. Arif Khan

HR Professional (9891497178)
28th September 2007

The minimum wages can be bifurcated in two components, first being the basic pay and other is dearness allowance so called as DA.

The Government in every six months revises the DA component of the minimum wages. If any of you have seen the Government Order (G.O.) of minimum wages issued by the State Labour department, you'll see these two components applicability upto a definite time period.

Please refer to the attachment, which has a minimum wages GO applicability upto 30th September 2007, where you will see Basic Pay in Serial No. 3 and Dearness Allowance in Sr. No. 5. You need to follow the same while making the salary. The basic pay of an employee can be more than the minimum basic pay as mentioned in the GO but it cannot be less than that of. In the same you can pay more DA to your employee but the DA figure cannot be less than which is mentioned in the GO.

Thus, the minimum has two components basic pay and dearness allowance. Contribution of PF and ESIC is both applicable on basic pay and dearness allowance.

I hope it's clear to you Sunita.

warm regards,

Umesh Chaudhary

1st October 2007 From India, Delhi

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