Please find answer to your query as below :
1. Minimum Basic & Maximum Basic (%) - minimum should be as per notified by authorities and Maximum is 40% which is been followed by many organisations but not compulsory.
2. Minimum HRA & Maximum HRA (%) - Minimum is 5% and maximum can be depending on company policy
3. Minimum DA & Maximum DA (%) - minimum should be as per notified by authorities and Maximum depending on your company policy.
18th September 2018
There are certain laws prescribed under the Act related to fixation of wages. Every establishment is bound to follow the norms. However, in case of wages / remuneration over and abvoe the las is solely company / establishment discretion. Pls note my replies:-
1. The Minimus Basic should not be less than as defined under the Minimum Wages Act by the appropriate Govt. However, there is no restriction of paying maximum basic (%). It can be as per company policy and company budget.
2. In some state the HRA is part of MW Act, there you have to pay the HRA as applicable in the law. But generally the HRA paid to take exemption under Income Tax Act, wherein it can be taken on basis of Income Tax defined rules. Maximum 50% HRA benefit can be taken, hence most companies pay 50% HRA on Basic Wages.
3. In some cases the DA is part of the MW Act. In such cases you have to pay minimum DA as defined under the Minimum Wages Act by the appropriate Govt. You can pay higher DA, If there is any separate formula in the company policy.
However, in case of payming maximum Basic and DA you have to take care and maintain proper budget related to future claims (PF, EL, Gratuity, etc.).
Hope the above will meet your purpose, senior can throw more light on the matter.
18th September 2018 From India, Delhi
If your business/employment falls under the sheduled emplyment under the Minimum Wages Act/Rules, based on skill levels/classification, minimum basic and prescribed DA( called special allowance) will have to be followed.
2. You can choose to pay more than the minimum prescribed.
3. To keep the labour cost at minimum, small/medium scale organisations follow wage policy of paying as per MW Act( Some violate and pay lesser by managing Inspector)
But progressive minded companies choose to pay more than minimum with fringe benefits to attract and retain talented workers/staff.
What should be minimum and maximum limits for various components of wages, is governed by several factors but to mention a few -- willingness to pay better, capacity to pay, scarcity of skill levels, application of technology and business growth opportunities available and host of other factors.
Wherever the establishment has a union, the wages are governed by negotiated long- term wage settlement containing wage scales, DA, allowances, leaves, paid holidays etc considering service conditions prevailing in the comparable concerns and capacity to bear burden of additional wage cost.
Thanks and Regards,
19th September 2018 From India, Mumbai