Thank you for your prompt reply
Just to confirm i got your point i am converting the above in numbers , if i am wrong please correct me.
adhoc pay 2000
DA per day basis 100 (given for working in field)
month 25*100 = 2500
Minimum wages paid = 7000 + (5% 3500)=175 +(adhoc) 2000 + 2500(DA month) =11675 ??
Minimum rate of wages.- (1) Any minimum rate of wages fixed or revised
by the appropriate Government in respect of scheduled employments under sec.
3 may consist of-
(i) a basic rate of wages and a special allowance at a rate to be
adjusted, at such intervals and in such manner as the
appropriate Government may direct, to accord as nearly as
practicable with the variation in the cost of living index number
applicable to such workers (hereinafter referred to as the “cost of
living allowance”); or
(ii) a basic rate of wages with or without the cost of living allowance
and the cash value of the concessions in respect of supplies of
essential commodities at concessional rates, where so
(iii) an all inclusive rate allowing for the basic rate, the cost of living
allowance and the cash value of the concessions, if any.
(2) The cost of living allowance and the cash value of the concessions in
respect of supplies of essential commodities at concessional rates shall be
computed by the competent authority at such intervals and in accordance with
such directions as may be specified or given by the appropriate Government.
This is what the bare Act says about components of Minimum wages.
The Minimum Wages Structure is state oriented matter. In some states it consists only Basic Wages, while in some cases it is Basic+DA.
I think your question is not clear. Instead of Minimum Wages you should ask components under CTC.
However, the Basic+DA should not be less than the Minimum Wages Notification as issued by the appropriate Govt.
But when the salary is paid over and above the Minimum Wages than we require Salary structure to make it more optimized (Tax friendly and increased In hand Salary).
The components can be Basic+DA (minimum should be as per the MW Act, no bar for maximum, you can consider 40%-50% of the CTC), HRA (to take IT Exemption), CCA, Special Allowance etc. etc….
Yes the components can be changes according to the employment nature. But the rules applicable only for a minimum level. Different Wages structure can be applicable for different type of employment (Industry, Factory, Special Zones, Seasonal employment etc.) For example in a state it can be different under S&E Act and in a Refinery located in the same state and Mines and so on.
In your example you took two HRA 3500 and (5% of 3500)=175, pls correct it. It should be Rs. 3500 both places. Since there is no deduction of PF, ESI, PT etc. , so that Wages Paid should be same on both places.
First of all let me thank You all for the responses , but i think i am not making myself clear.
What i want to understand is how to calculate whether the proposed break up of a salary is fulfilling minimum wages or not ?
So to be specific let me pinpoint the case :-
Location : Delhi under shops and establishment act
if the company wants to incur a total of 15k on an employee how to break up so that it is under minimum wages act and the statutory deduction be minimum ?
The Minimum Wages in Delhi region is almost equal to 15 K and in some cases it is even more. There is no need to make breakup, you need to pay the MW in the Basic Wages only.
I got the point that your question is not clear. No problem it happens when you learn new things. That's why we are here for learning on sharing basis.
Pls find below detail of applicable Minimum Wages in Delhi Regions
Unskilled = 13896.00
Semi-Skilled and = 15296.00
Non-Matriculate (office work)
Skilled and = 16858.00
Matriculate but not Graduates (office work)
Graduate and above = 16858.00
(Supervisor or office work)
However, in respect of minimum statutory deduction / cost, you can freeze the PF Wages upto Rs. 15,000.00. Than you can save employer PF Contribution and “In Hand” salary will also increased.
Hope the above will solve your query.