Madhu.T.K
Industrial Relations And Labour Laws
Saswatabanerjee
Partner - Risk Management
HARIOM SHARMA-SEPL
General Manager Finance
+1 Other

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Can we avoid to give increase in industrial workers VDA/ hike of minimum wages by setting some higher basic wages of industry workers (above minimum wages rate). That will be legal pursuant to minimum wages act.?? Kindly comment.Thanks.
From India, Delhi
Hello,
As long as the 'worker' falls under the definition of the Payment of wages act by virtue of the work that he/she does; it doesnt what even if the Basic wage is at Rs.30,000/- pm. It still is mandatory to provide minimum wage greater than or equal to what is applicable for your industry/location.
* Reference for worker definition is "payment of wages act".
On a more humane side, the reason why a minimum wage is recommended by the govt is because statistics show that in order to survice and have 2 meals, roof on the head, basic healthcare - one needs to be paid a minimum wage per day. Without which its not possible to survive. As humans this is the bare minimum consideration we should give to our fellow human beings.
Hope this clarifies your doubt.
Warm Regards,
Deena J

From India, Mumbai
Minimum wages law states that wages paid should be more than minimum wages specified in the notifications
The notification specifies basic and DA. So your basic and DA together needs to be higher than that of the current minimum wages notification. And the notification is revised every 6 months. So each time you need to be above that level
If you want to give basic above what you anticipate as the minimum wages of next year then possibly you won't need to give increments till the levels are breached

From India, Mumbai
Dear All, Thanks very much. But the answers are not satisfactory.
From India, Delhi
The problem is not with the answers but with the question. My understanding of the question is that, can we fix a salary above the minimum wages without any VDA so that there is no need to adjust the VDA periodically? is that correct? If so please read what Saswata Banerjee has said. He has rightly said that there is nothing illegal if you give only basic salary provided the same is above the minimum wages. For example, if the minimum wages is like Basic Rs 5000 and DA Rs 9000 and you give your workers Rs 9000 as basic wage and no DA, then legally you are said to comply with the Minimum Wages act requirements. But the thing is that normally the VDA is revised over a period of time, say once in 6 months or a year or even in every month (as in Kerala) by linking the same to Consumer Price indices. When the DA is increased you would be paying short of statutory salary. Therefore, while fixing a salary without VDA you will have to provide a cushion so that an increase in the VDA will not be a problem. Continuing the above example, if the increase in the DA as per pattern followed is Rs 600, then you can fix a salary of Rs 10000 which will normally protect the increase in DA also.

Madhu.T.K

From India, Kannur
This is very Good Platform, I thanks to the Cite Team,

Dear Madhu.T.K , Thank you very much ; what you have mentioned is a very good interpretation pursuant to labour laws.

However some one may expect from the creator of law as "rate/s as defined by minimum wages Act must be an entitlement of all workmen engaged in production, and increase in DA should become an right to get increased (DA) by law".

As a result the minimum wages should be expected as applicable to all industry workers as per minimum wages Act, and any sum being paid in excess of that should be considered as a separate allowance beyond Basic +DA. The purpose to say here is that :

1. every production workman should be covered under minimum wages act. 2. Production workmen should get basic+DA as per minimum wages Act only, as defined by Government time to time. 3. Any increase / efficiency allowance increased needs to be kept out side the limit of minimum wages Act.

4.OR There is need to request to The Government to amend minimum wages Act , to compute minimum wages with respect to years of experience of any workman, for example A workman is having 10 years experience and worker B is having experience of 1 years in such case minimum wages needs to be differently decided for both the workers with respect to the years of service /experience.

The minimum wages act should be applicable for industry / production/ manufacturing or to any employee whos salary is below minimum wages Act at the time of increase in DA.

Kindly you may put your comments if feels it fit.

From India, Delhi
Normally all notifications pertaining to minimum wages will have a provision for increase in the basic wages depending upon the service of workmen. Accordingly, the minimum wages of an employee who has been in service for 5 years or 10 years will not be the same as that of a fresher.

Minimum wages has been notified not only for manufacturing industries but for almost all sectors. Accordingly, there are minimum wages for employees working in shops, commercial establishments, hotels, IT and ITES services, domestic services etc. The number of scheduled employment may differ from state to state but most of the states have covered the important industries.

Though minimum wages comprises of a basic wage and a dearness allowance varying according to changes in cost of living indices, there is no need to take these two components separately. In Airfrieght Ltd Vs State of Karnataka (1999 LLR1008), the Supreme Court had held that if the company is paying more than the minimum wages then the company is said to comply with the requirements of the Minimum Wages Act and there is no need to pay Variable DA separately. Only thing to be ensured is that the amount you pay should not be less than the sum of basic and DA at any point of time.

Madhu.T.K

From India, Kannur
we have permanent employees under union in engineering industry and they are having salary above minimum wages i.e., Rs. 5704.70+ 2898.70 (D.A)= 8603.40 and contract workmen having salary 3130 + 2898.70 (D.A)= 6028.70 as on 01/03/14 and on 03rd march 2014 as per notification the minimum wages were revised as below and basic was as below:
basic - 6000 + D.A 1624 (as per notification dt-22/04/14 for period 03/03/14 to 30/06/14)= 7624 (Unskilled)
the same revision we gave to the contract workmen who were below minimum wages (3130 +2898.70 =6028.70) we paid them 6000+ 1624=7624
to permanent employees as per settlement with them they were liable only to the increase part and difference part of special allowance which is declared by government and hence this Rs.1624 rise in D.A was not given to them which was in between of six month period from 03/03/14 to 30/06/14 and could not find out the difference of D.A because the D.A was revised with new series 2001=100 and previous D.a of old series was 2898.70
as per notification dt-06/08/14 the D.A for period 01/07/14 to 31/12/14 was declared to Rs.1652 than the rise to be given will be Rs.1652- 1624 = 28, the same was accepted by contract workmen but permanent union employees do not accept the same they demanded Rs.1624 form 03/03/14 and Rs.28 from 01/17/14 total 1652.
i want to know whether that Rs.1624 rise in between six months period i.e. 03/03/14 to 30/06/14 is laible to union employees who are above minimum wages and what will be the D.A amount for period 01/07/14 to 30/06/14 to be given to union employees.
that Rs.1624 rise in D.A was only to minimise the wages and not to workers above minimum wages not clear.
please clarify me and help me.
ramesh gujre
8108196831

From India, New Delhi
Any increase in the DA due to increase in consumer price index should be paid to workers because with every increase in the DA consequent to increase in the CPI.
But I didn't get what is the significance of this 2014 DA in 2018?

From India, Kannur
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