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Wages Rule According to Labor Law

Can anybody let me know about the wages rule according to labor law? Should it be calculated on the basis of 26 days (4 weekly off) or 30/31 days? Many companies are following the second option, so all are requested to kindly clarify the above-cited subject. Which method is most preferable according to the law? Kindly help.

Thanks,

Regards

From India, New Delhi
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There is no law on salary calculation. As per the law, three days of continuous work require us to give one day off, so it totals 26 days of working plus four weekly offs. Both calculations are preferable; according to my knowledge, the second one is better.
From India, Mumbai
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Dear Neetu, AS per law, after every 6 days, there should be as Off, which should be as paid holiday.. so, it means 26 +4.
From India, Mumbai
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It is really an interesting concept/question for which I have been looking for an answer for a long time, but I haven’t got a clear and crisp answer. However, I will just try to give you some justification on it...

Indian Legislation on Daily Wages

If you refer to the Indian Legislation, you will come across the discussion on the daily wages concept either in the Minimum Wages Act or the Payment of Wages Act. Apart from this, the minimum wages notifications are also released across India by the labour and employment department into daily and monthly basic wages, which clarifies the following things:

1) To calculate labour wages, we consider monthly wages for 26 days (excluding Sundays) and accordingly pay them. However, in this case, we follow the S&E Act. While paying daily wages, an employee is entitled to 1 day's wages for working a week in that subsequent month, which means if an employee doesn’t take a holiday except on Sunday, he is entitled to complete minimum wages notified by the authority.

2) But when we calculate employee wages, the same minimum wages are to be considered for 30 days (including Sunday) and accordingly paid to them.

So, it is summarized that while paying wages for the labour category, 26 days should be considered, and for the worker category, it should be considered for 30 days.

I sincerely convey that this justification may be invalid and erroneous and would invite seniors to throw some light on it.

Regards,
Janardan

From India, Mumbai
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DJ
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A month is any one of the twelve periods of time into which the year is divided. We all know well that a year normally comprises 365 days, but a leap year has 366 days. When we divide 365 or 366 by 12, we get fractional values only, i.e., 30.41 and 30.5 only. However, in the English Calendar, some months have 30 days, some have 31 days, and the month of February has 28 or 29 days. In the Tamil Calendar, some months even have 32 days. Therefore, the number of days a month comprises is a matter of approximation for calculation purposes.

Wages and Salary in Employment

In the field of employment, wages or salary is, in general, the compensation given to the person employed in consideration of the work done by him or her. It may be based on the quantity of work done, piece-rate, or time taken in terms of hours, days, weeks, months, or years, or a combination of quantity and time. It depends upon the nature of work or the nature of the employment relationship. When the employment relationship becomes continuous or permanent, a consistent level of efficiency is expected from the employee, and to maintain it, the wages paid by the employer have to include the day of rest. Therefore, for the sake of convenience of calculation, a month is assumed to have 30 days or 4 weeks (though a week actually has 7 days).

The Concept of Rest Days

Whether as a matter of religious impact or physical limitation, I don't know why the 7th day after continuous work for 6 days became a day of rest by convention and by law as well. By adding up the 26 days of actual work plus the 4 days of rest, a month is recognized to comprise 30 days as an economic reality for calculation purposes in the realm of employment. Regarding the justification given by Janardhan (with an element of well-founded doubt, of course), I would like to request him kindly to go through Rule 23 of the Minimum Wages (Central) Rules, 1950.

Regards

From India, Salem
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The total wages for the month should be equal or above the minimum wages per month whether you give the wages on 26 days or 30 days attendance.
From India, Trivandrum
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Wage Calculation According to the Minimum Wages Act

As per the Minimum Wages Act, wages should be calculated by dividing the monthly wages by 26 days to arrive at the daily wage. Gratuity should also be calculated using the 26-day formula. However, in the case of months with 30 or 31 days, there is no specific written document or section mentioning any alternative calculation method to my knowledge. Therefore, it should be calculated based on 26 days.

Regards

From India, Mumbai
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Clarification on Wage Calculation Methods

Sh. Umakanthan M, in his remarks, has referred to Rule 23 of The Minimum Wages (Central) Rules, 1950, wherein the method to calculate the minimum daily rate of wages is mentioned as dividing the minimum monthly rate of wages by 26. I would like to point out that under Rule 2(1-B) of the ESI (Central) Rules, 1952, there is also a provision for dividing the amount of wages by 26.

However, I would like to mention that a similar subject was previously discussed in detail on this CiteHR platform, with reference to the following post: "Monthly salary to be divided by 30 or 26 days??" https://www.citehr.com/349052-monthl...#ixzz36wuMoALh.

Thank you.

From India, Noida
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Understanding Working Days for Wage Calculation

Working days in a month may be 26/27, with 4/5 weekly offs falling accordingly as a standard practice. Considering the weekly off in question is mandatory as per legislation, it is clear that 26/27 days may be used for calculating wages.

Regards

From India, Vadodara
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Since most labor laws, like the Bonus Act, Gratuity, and Minimum Wages, provide for calculation on a 26-day basis, it should always be 26. By doing so, we pay for off-day wages proportionately. In my opinion, it should be 26 days. The Factories Act provides for 1 day off for every 6 days worked. There is no provision for a part off day or off day for less than 6 days of work. Most employers adopt a practice of paying proportionate off-day wages. However, for the calculation of leave wages, it is again 26 days, as provided in the Factories Act and similar acts. Instead of adopting different methods of calculation, it should be made a standard of 26 days. This stops all kinds of disputes with your wages.

Regards

From India, Jamshedpur
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Dear sir, AS per law, after every 6 days, there should be as Off, which should be as paid Holidays, which means 26+4 Jeevajothi k Complainces Executive.
From India, Chennai
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The Factories Act provides for weekly off ,not wages for the weekly off. Varghese Mathew
From India, Thiruvananthapuram
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Dear Seniors,

Understanding Daily Rate Under Minimum Wages Act

The daily rate under the Minimum Wages Act is fixed, taking into account 6 days of working in a week. The wages for the 7th day, i.e., Sunday, are included in the daily rate that is fixed. This is applicable for daily-rated employees, whose number is higher in unorganized sectors like mines and factories, especially those working as contract labor under different contractors.

Monthly Wages Calculation

For arriving at monthly wages, the number of days considered is 26 days, excluding the 4 Sundays. However, for monthly salaried employees, benefits are calculated on a 30-day basis.

I hope this explanation is correct. I kindly request observations and comments from seniors.

Regards,
[Email Removed For Privacy Reasons]
Date: 10.7.2014

From India, Bangalore
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Dear Neetu,

It is clear that "Weekly Off" and "National Holidays" are our own, besides some "Festival Holidays" as approved by the Government. The fact is that the calculation asked by you is always at 26, but it is a bad practice and tendency of the industrial personnel to calculate at 30. Everybody knows all the benefits are to be paid at 26 days of working, so why is the calculation of salary at 30, 31, or 28 days of the month?

That's why a daily wage worker is always being paid excluding Sundays.

Regards,
Tejpal Negi

From India, New Delhi
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Anonymous
As per the Minimum Wages Act, daily wages are provided. An employee working for 6 days is eligible for a paid day off on the seventh day. Therefore, the total wages cover 7 x 4 = 28 days plus any additional days worked in the month. This effectively spreads the daily wages over 30/31 days. When calculating allowances, only the working days, totaling 26, are considered.

Thanks and Regards

From India, Mumbai
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Understanding Wages Payment Calculation

Wages payment means compensation for the working days in a month. Therefore, a calculation based on 26 days per month is appropriate. Payment for 30/31 days is also acceptable. According to the institution's policy, payment is made for 26/30/31 days as applicable. As per the Payment of Wages/Minimum Wages Act, the calculation is based on 26 days only.

Regards.

From India, Hyderabad
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Dear Neetu,

The minimum wages are calculated by dividing by 26 days; therefore, it is advisable to use 26 days as the basis for calculating wages for purposes such as leave encashment and overtime (OT). However, it is not explicitly mentioned under any labor laws.

Regards,
Madan Singh
[Email Removed For Privacy Reasons]

From India, Delhi
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Clarification on Wage Calculation

Find below clarification regarding your query:

a) To arrive at daily rates, monthly rates will have to be divided by 26, and to arrive at weekly rates, daily rates will have to be multiplied by 6.

b) A normal working day shall consist of 8.30 hours, including a half-hour interval for rest.

c) One day in any period of seven days, as may suit local convenience, shall be the day of weekly rest.

d) The minimum rates of wages include the wages for the weekly day of rest. Payment for work done on the day of the weekly rest and for work done beyond the normal working hours shall be double the ordinary rate of wages.

e) Where the existing rates of wages of any employee based on contract, agreement, or otherwise are higher than the rates notified in the Minimum Wage by the State Govt, the higher rates shall be protected and treated as minimum rates of wages applicable for the purpose of notification issued by the State Govt. to such employees.

f) The minimum rates of wages are applicable to the employees employed by the contractors also.

g) The minimum rates of wage for disabled persons shall be the same as the workers of the appropriate category.

h) Men and women shall receive the same rates of wages for the same work or work of a similar nature.

i) The minimum rates of wages and variable dearness allowance, if any, both constitute the minimum rates of wages and shall be enforceable under the Minimum Wage Act, 1948 (11 of 1948).

In conclusion, I wish to add that monthly wages include all weekly off days. But while calculating daily rates of wages, monthly wages should be divided by 26 days.

Regards,
Sibabrata Majumdar
Management Consultant Legal
Kolkata, [Email Removed For Privacy Reasons]

From India, Calcutta
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In my view, 26/30 and 31 are different as per the law. 26 refers to working days, and 30/31 are pay days. In the case of salary payment for monthly wages, working days will be the actual working days, excluding weekly or any other off/holiday. If you receive wages based on daily wages, then you should consider the working days/pay days.

Regards,
Sushil Kumar

From India, Bareli
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Calculation of One Day's Wages

Whether you take 26/27 (there are 27 working days in some months), 28 or 29 (February), 30, or 31, you should apply the same formula for calculating one day's wages for payment of wages, leave surrender, and deduction for absence. The best way is to take 30 as per the General Clauses Act.

Regards,
Varghese Mathew

From India, Thiruvananthapuram
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Calculation of Salary According to Labor Law

Lots of acts are discussed at great length. In my opinion, the article displayed on the website of the Ministry of Manpower sufficiently provides the facts for the calculation of the gross salary payable for the month. It is calculated on the basis of the following formula:

Salary payable for an incomplete month of work = Monthly gross rate of pay × Total number of days the employee actually worked in that month / Total number of working days in that month.

Where the total number of working days in the said month should correspond to the actual working days of the month. In Ahmedabad, we have staggered days on Thursdays in the Vatva Region. So, if in a month of 31 days there are 5 Thursdays, then the number of working days comes to 26. And if in a month of 30 days, it is 5, then it shall be 25. It is never fixed at 26 or 30.

The link to the above-mentioned law is as follows:

[Calculation of Salary - Ministry of Manpower](http://www.mom.gov.sg/employment-practices/employment-rights-conditions/salary/Pages/calculation-salary.aspx)

Regards

From India, Delhi
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If you are appointed through a contractor, you will be paid for 26 days a month. On the other side, if you are appointed through an organization, you will be paid as per the second option. There is no rule binding in this system. This is my practical experience.

Regards

From India, Gurgaon
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Clarification on Weekly Off Deductions

I feel that this is the right time to seek clarification. Some companies are practicing deducting the weekly off if an employee is absent the previous day and the next day to Sunday (Saturday and Monday). Is this the right practice? Please help me.

Regards,
Selvam

From India, Madurai
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In the above replies, it should be calculated with 31/30 days, not 26 days. However, in many companies, wages are calculated with 30/31 days.

In my view, if an employee is receiving a specified monthly salary, then there is no such rule. But if it's based on daily wages, then it is calculated on 26 days in a month.

Thank you.

From India, Dehra Dun
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For the factory, the salary is calculated for 26 working days of the month out of 30 days. Four weekly offs are paid weekly.

For shops and establishments, the salary is calculated for 30 working days of the month of 30 days, including four weekly offs.

Difference in Salary Calculation

Let's assume a person is paid 10,000/- as their salary. If we go by the first calculation, then the per-day salary of the person would be 384.6. However, if we go by the second calculation, then the per-day salary of the person would be 333.3.

Now, let us assume that the said employee is on leave for three days due to illness. The salary deductible would be 1,115.3 as per the first calculation and 999.9 as per the second method. The second method appears to be more beneficial for employees.

Therefore, the second method is better than the first method from the employees' point of view.

Regards,
Octavius

From India, Mumbai
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What an interesting topic you all are into! Don't worry, friends. Kindly follow any of the below simple steps. Nobody will question you.

Regarding the Weekly Off

See the notification states as below: "The minimum wages shall be inclusive of payment of remuneration in respect of the weekly day of rest."

Ways to Calculate Wages as per the Factory Act

1. 26 days as base days. This is applicable everywhere, including OT.
2. Now, this is the actual calculation, which can apply to many organizations and is not debatable.

For Monthly Wages

Base days = Total days of the month (- minus) No. of Weekly offs
E.g., For Jan 2014: 31 (total days) - 4 (Sundays) = 27 days
For Feb 2014: 28 - 4 = 24 days
For March 2014: 31 - 5 = 26 days
And so on...

For OT, you have to calculate on 26 days (applies here as well).

Thanks.

From India, Mumbai
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This doubt arises many times during wage and other calculations. I would suggest referring to the judgments by the Honorable Apex Court, High Court, as well as other relevant courts.

1. Hindustan Lever Limited vs Kasargod Devidas Rao And Ors. on 21 August 1989
2. Jeewanlal (1929) Ltd. Etc. vs The Appellate Authority Under The ... on 29 August 1984
3. Beed District Central ... vs State Of Maharashtra And Ors on 29 September 2006

Thanks & Regards,
Sanjit Patel

From India, Ahmadabad
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The following wage categories are defined by the state and central government:

Wage Categories

1. Monthly Wage
2. Daily Wage

Wages for workers are calculated based on 26 working days, while salaries for staff and employees are based on 30 days. In both cases, every six days of work entitles the employee to one holiday, and every 20 days of work entitles them to one paid leave.

From India
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Kindly go through the Minimum Wages Act notification, which is issued every six months. It clearly states that the wages are for 26 days, inclusive of Sunday, and any duty done above that is considered overtime. This notification is released when the DA (Dearness Allowance) is changed.

The contractor receives payment for 26 days from you and pays for 30 days to labor. This is something you need to check.

Regards,
Captain Rajeshwar Singh

From India, Thana
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Hello All,

One question has arisen in my mind: if a laborer is working in an industry under the contract labor act, is he entitled to a paid weekly off or not? If yes, please let me know the details about it. Is there any law for monthly rated employees?

Thank you.

From India, Pune
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WE ARE PAY DAILY WAGES according to 26 days but for the month of june 2019 5 weekly off & we are not pay for any sunday. so how we are adjust the 26 days in june 2019
From India, Delhi
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Dear Friends,

As gratuity and bonus are calculated for 26 days, why can't we calculate the salary for 26 days and include 4 W/O? Is there any rule in Karnataka that specifies the same?

Regards,
Vivek

From India, Bengaluru
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Straight away, as per the Minimum Wage Act, for the calculation of wages, etc., 26 days should be considered. This means there is no need to account for any days in the month; simply consider 26 working days and calculate the monthly wage.

Payment of Monthly Wages

For the payment of monthly wages, the following should be taken into consideration:

Total wage days as per the Act: 26 Days
Less: Total Leave/Absent days: 02
Wages should be paid for 24 days, and PF, Gratuity, retrenchment, leave wage, etc., should be calculated accordingly.

Regards,
Nitin S.

From India, Lucknow
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