Saswatabanerjee
Partner - Risk Management
Stephen_7
Senior Officer - Hr
Bittu777
Hr Professional
+1 Other

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Hi Seniors Thanks in Advance.
My First question is that Basic salary should be as per minimum wages or In Hand salary should be as per minimum wages act because companies are deducting the pf on basic salary which is less then minimum wages to save their contribution and when asked to increase the basic salary it is being denied by employer.
My Second question is if an employee is joined a company 8 years back and that time he was not given appointment letter now company wants to give him but the registered name of company has been changed and also company has not mentioned any record of his date of joining.
what to do in this situation.

Gross wages should be equal or more than the minimum wages prescribed by your state government. It is not required that the basic should be same as in the minimum wages. The gross wages only will be considered on deviations.
Basic is also to be viewed with respect to PF
There are judgements and notifications from PF office providing guidelines that PF should be dedicated at least on minimum wages and hence the Basic should be at least equal to minimum wages where total wages is atlest minimum or more.
Regards
Shailesh Parikh
9998971065
Vadodara
Gujarat

concept of basic is not defined in the various acts.
So there is ambiguity.
However, minimum wages notifications state that basic and DA together should be more than a particular amount. So in effect, minimum wages is on basic plus da.
The PF department has also take the same stand.
However, the courts have given different judgements and the Supreme Court is yet to take a call on it.

As per the PF Notification the PF deductions should be on minimum wages or half the gross wages whichever is higher. One cannot bifurcate the minimum wages as the call on this issue hasn't taken yet by Honourable Supreme Court.
I think it's the other way round.
The various courts have given conflicting decisions.
The Supreme Court has not given the final decisions.
Therefore till the time the decision comes, you can get away with bifurcation the salary

Can anybody let me know about basic? While designing salary component i will calculate DA as per 6 monthly circular but from where I will get basic rate for metal industry? Also, Is DA and special allowance are same?
Regards,
Bittu

I assume you are talking of the basic and DA as per minimum wages act.
It is specified in the minimum wages notification (comes every 6 months from your state government)
Special allowance specified in ththe notification is same as DA.

Dear Mr. Saswata,
Thanks for your reply. I understand that, special allowance and DA are same. But while designing the CTC from where should I take basic rate? Secone query, how should I identify in which Zone (I, II, III) my company included?

Check the latest notification of the state. It already defines what is zone 1,2,3,4
All metro and large cities are zone 1
Rural and backward areas are zone 4
Generally concept or ctc rarely comes when you are talking of minimum wages. First your basic and da has to be above minimum wages level (basic plus special allowance). After that, it does not matter what you put in allowances. If the person has taxable salary, put 1600 in travel allowance and relevant part in HRA. NOthing else matters.
Only remember, higher the basic higher the PF contribution

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