Mayank-lad
Legal Consultant

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Dear experts, It has been observed that in spite of minimum wages rules and regulations by the State authorities and by the central authorities, meaning companies do not provide wages as per minimum wages act.
I found in many companies the salaries are far below than the minimum wages prescribed in the notification.
My questions are:
1. Is it compulsory to pay minimum wages as prescribed since many companies are not following it in practice?
2. The minimum wages prescribed in the notification are basic or gross salary?
3. Do minimum wages change as per the skill level of employees?
4. Many small companies do not afford to pay the salaries as per minimum wages act.
So how much company should face this problem?
Kindest regards

From India, Bhubaneswar
1. Is it compulsory to pay minimum wages as prescribed since many companies are not following it in practice?
Reply: Under The Minimum Wages Act 1948 , it is mandatory to pay Minimum Wages as per the class of Industries as defined under the Schedules of the Act. No company can avoid this. It will be illegal and the Courts / Labour Dept may take serious action against the non compliant companies.
2. The minimum wages prescribed in the notification are basic or gross salary?
Reply: The minimum wages are different for different class of Industries as notified by respecive State Govts. from time to time. The minimum wages are BASIC, there will also be a column specifying Special Allowance (DA). These together becomes Minimum wages. Thereafter addition of Allowances such as HRS, PF, ESIC, any other allowance, etc. to be added to arrive at Gross Salary.
3. Do minimum wages change as per the skill level of employees?
Reply: Yes. The minimum wages are notified as per Class of Industries, category of workmen i.e. Skilled, Semi-skilled and Un-skilled (only 3 categories) and the different zones in which the establishment operates (eg: Zone I, II, III as defined by the sate)
4. Many small companies do not afford to pay the salaries as per minimum wages act.
Reply: It is Mandatory for all companies/Employers to pay salaries as per Minimum Wages Act. It oes not matter if the size of the company is big or small or a question of affordability. Further, any contravention of the same may open up the Employer to Penal consequences under the ACt or IDA or any other provisions of Law
As discussed above, it is mandatory to pay salaries as per Minimum wages as applicable to the establishment/Industry and there is no way out of the same.
Hope this answers your query
Regards


Dear Mr Amar,
Paying less than minimum wages is an offence. It is also duty of one to bring the violation to the notice of the authority for action.
The salary is something different from wages. The salaried people get various allowances in their payment. Whereas people are being paid as per the rate declared by the appropriate govt may be central or state.
1. Is it compulsory to pay minimum wages.
2. The minimum wages prescribed in the notification are basic wages.
3. Minimum wages is as per the skill level of employees.
4. The companies may be small or large are bound to pay minimum wages, it is mentality of the employer not to pay but it is wrong to say that not affordable. To run a company/business one can not violate the rules regulation of the land in force.

From India, Mumbai
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