Dear Team, One of my client's Factory of Ghee production in Maharashtra. The factory is at zone III and corporate is in the zone I.

In Maharashtra basic for skilled in zone III is 10440 and DA is 675 for the factory.

Then for the corporate office (which governs by the "Maharashtra shop and establishments Act" ) which is in the zone I, basic for skilled is 11632 and DA 1092.

The client wants to go as per minimum wages. (whatever is at present in Maharashtra)

As per my knowledge all employees getting salary less than minimum wages in respect of their working places ( as per workplace zone) will upgrade their salary as per minimum wages and no splitting (of Basic + DA amount) will be allowed for PF contribution.

Now my query is, what will be the salary structure for those employees who are getting salary more than govt decided minimum wages in respect of their working zone, but their Basic and DA is less than minimum wages in comparison of govt decided basic and DA.

Please guide me.

From India, Mumbai
Dear Alka,
This issue had already been settled by the Apex Court in Airfreight Ltd case. For the purpose of deciding the remuneration paid under the contract of employment, you have to take wages in its entirety as a single package. For the purpose of determining parity between the industry wages or the wages under the contract of employment and the statutory minimum wages, you have to exclude from the industry wages all the excluded components mentioned in the definition of the term "wages" u/s 2 (h) of the Minimum Wages Act,1948. Thus, if the sum total of the industry wages minus its excluded components is equal to the sum total of the statutory minimum wages, it is okay.

From India, Salem
Dear Alka,

The employees to whom you depute from your office i.e. existing in Zone I to factory at zone III are eligible for rate of zone I.

The employees do not come under your office i.e. existing in Zone I and working in factory at zone III are eligible for rate of zone III.

Your client would reimburse the rate of Zone III but not the rate Zone I because that is the statutory rate.

The client wants to pay as per minimum wages is genuine and obvious one.

You take up the matter with your client that employees are complaining that they are paid less than the minimum wages, if you are sure of it.

The splitting of minimum wages in component is illegal. It is difficult to say anything without details in hand. You better discuss the matter with the labour inspector having the copy of pay slip in your hand.

From India, Mumbai
As per the query, what will be the salary structure for those employees who are getting salary more than govt decided minimum wages in respect of their working zone, but their Basic and DA is less than minimum wages in comparison of govt decided basic and DA.
To my opinion it will be required to change their Basic and DA as per minimum wages of the respective zones and the left over amount if any pay as HRA to stay at safe side.
S K Bandyopadhyay ( Howrah, WB)
CEO-USD HR Solutions
+91 98310 81531
USD HR Solutions – To Strive towards excellence with effort and integrity

From India, New Delhi
The computation of PF is now based on gross wages less HRA and certain specified allowances and overtime.
Further under the new code of wages applicable from april 1, 2021, Basic + DA needs too be at least 50% of gross wages. You need to take that into account when deciding the structure of the wages

From India, Mumbai
Dear Alka ,
Greetings for the day,
First of all get understood that Minimum Wages is a statutory liability for the employees falls under the category of Un Skilled-Semi Skilled-Skilled & of Supervisory Capacity not for Management Representatives . Secondly The Salary Structure For Those Employees Who Are Getting Salary More Than Govt Decided Minimum Wages I thinks they are in management capacity so for them the salary structure Should be Basic-50% of the gross salary ,HRA-50% of basic for metropolitan or 40% of the non metropolitan whatever be the category ,Conveyance -Rs. 1600/- exempted from IT, Medical Allowance -Rs.2500/- exempted from IT rest should be put under other allowances.But remember Basic can't be less that the minimum wages defined by the state government time to time.
Thanks & Regards,
From,
Sumit Kumar Saxena

From India, Ghaziabad
Minimum wages means the the lowest wages that can be considered for a perticular employment category.Anything above this can be adjusted in other heads of salary however the statutory compliance calls for inclusion of all the manadatory heads as applicable.
Pls ensure that IT is also given due care while managing the other heads for salary.
Appropriate would be to ensure that minimum wages be considered strictly whole computing salary structure.

From India, Vadodara

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