Labour Law & Hr Consultant
Sr.manager - Hr&admin
Satya Pratap Detha
Manager - Hr
+2 Others

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Our company has head office in Mumbai and branch in Chennai. there are two types of workers in Chennai, Type 1: employees of Mumbai Head office,deployed to Chennai for limited period of 2-3 years; Type 2 : employees of Chennai branch, recruited for and deployed at Chennai branch.
Minimum wages of which state would be applicable in both these cases. Kindly advise

Hi Namita,
Employee deputed to Chennai from Mumbai will obviously fall under Maharastra Minimum Wages Act and employees who were recruited at Chennai will fall under Tamilnadu Minimum Wages Act as the place of operation is in Chennai Tamilnadu.

Statutory minimum wages are fixed and the Minimum Wages Act,1948 is administered by the Central and State Governments in respect of scheduled employments respectively earmarked for each as per the definition of the term " appropriate Government " under the Act. Therefore, from the perspective of application, basically, statutory minimum wages are always location-specific. In other words, the actual place of work of employees decides jurisdiction and not the place of authority of recruitment and control of their employment. In this back drop, the application of the provisions of the MW Act,1948 to the employees of a Company having its registered office in one state and branches in different states would be according to the norms prescribed by the respective State only where the employees actually work. Here, one should not be carried away by the intricacies of the meanings of terminology such as " deputation" or "transfer". What to be seen is where the actual employment continues substantially.
Hi Namitha,
In your case, the Tamilnadu Minimum wages act applies for all employees, who are working in Chennai location, irrespective of the location of their appointment.

If the company has salary structure and policy by which salary is above the minimum wage fixed by any state where its employees are working,then you need not worry about it.Problem occurs only where the employer is paying only @ minimum wages.
In reply to post from VargheseMathew, the salary in this case is above minimum wages, however as per agreement with workers, DA increase as per minimum wages has to be affected for all the workers as an when the notification is released. thus we wanted to confirm which minimum wages notification to be followed in case of Chennai branch employees.
In the state where the employee actually working, Minimum Wages rates of that state will be applicable.
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