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WO issued to Contractor based on the estimate of present Basic for 2 years that no increase of VDA & statutory wages will be given for WO period as per Tender, but in between Gov. announced new Basic (of increased amount) in the protection of minimum wages. As a Principal Employer, do we have to give increased Basic arrears or not?

Labour Law & Hr Consultant
Pan Singh Dangwal
Joint Manager
Hod(contract Management Cell)


Certainly ' YES ', because it is the ultimate responsibility of the principal employer to ensure payment of wages under section 21(4) of the CLRAA,1970.Wages means the statutory minimum rates of wages as applicable from time to time.
From India, Salem
Pan Singh Dangwal

Dear Member,

When we issue any WO with comprehensive nature or fixed price, as a principal employer we should consider some tentative amt for expected rate revision or cost hike (specially in case of huge manpower contracts).

In MNC or big companies WO approval is processed on basis of L1 pattern only in which MW Revision point not considered.

In order to achieve L1 targets contractors consider the existing wages with optimized statutory benefits which is not the right practice.

In order to overcome the situation while process the WO, we should consider approx. 5% rate revision. However, special comments should be mentioned "The revised rates will be applicable after prior approval". The signing authority will make sure the hike should be related to MW Hike factors only.

I deal with more than 100 contracts in which I consider approx. 5% hike (related to MW, increase in manpower, unexpected OT etc.). But while process the bills I check the actual cost should be as per norms and must be pre-approved by adequate authority.

In your case now you should first calculate the existing cost factors + upcoming expected cost hike (if any). On basis of the calculation you can issue Amendment of the WO.

Hope the above will serve your purpose, senior pls suggest more inputs.

From India, Delhi
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