smitha-ganiga
Dear HRs, I have recently joined a new startup wherein there are only 10 employees as of now and nothing is in place.
I m currently working on salary breakup structure, there are employees whose basic is above 15k but there are some who have it less than 15k as their basic so is there any mandate in terms of labour or wages act wherein basic salary guideline is mentioned.

Details to understand this better:
State: Mumbai
Industry: Ecommerce

Want to understand how would PF, ESIC work for us? bcuz we have not yet implemented that.
Please help me with your valuable inputs

From India, Mumbai
PROFESSIONALS AND BUSINESSES PARTICIPATING IN DISCUSSION
Madhu.T.K
Seasoned Ir Professional
Smitha-ganiga
Assistant Manager - Hr
+1 Other

Madhu.T.K
4193

You need not implement ESI and EPF in your organisation. These Acts will automatically apply to your organisation when he number of persons employed exceeds 10 in the case of ESI and 20 in the case of EPF.

In respect of employees who are not managers per function, it is better to pay salary at least equal to the notified minimum wages. This is available in the official website of the labour department. If your industry, e-commerce, is not notified, you may chose to pay the wages as applicable to the industry almost similar to yours. Rs 15000 per month would be fair. There will not be much complicated break up but a basic wage and a dearness allowance (Special allowance in Maharashtra) are the components required. The dearness allowance should change depending upon the cost of living index and that will also be available in the website.

Since you have ten employees, you should take ESI registration now. Once registration is obtained, you should register those employees under ESI whose salaries do not exceed Rs 21000. These processes are online and simple.

From India, Kannur
smitha-ganiga
@Madhu T.K. Thanks for the relevant information Also just wanted to understand for ESIC is implemented for employees having gross salary 21000 or net or basic ?
From India, Mumbai
Madhu.T.K
4193

Coverage is to be given to employees whose Gross Wages is not more than Rs 21000. Only washing allowance (provided you have issued uniforms to your employees and that also at a reasonable rate) and conveyance allowance can be excluded from gross salary.
From India, Kannur
kavipune@hotmail.com
1

Hi,

Basic salary should always be 40% to 50% on the total CTC excluding any incentive portions.
If the gross salary is less, then pl plan to retain it at Rs.15000 and plan other components accordingly. Also ensure to comply on the respective State Government Minimum wage rules.

Currently PF basic salary is fixed at 15k per month and ESIC is fixed for 21k gross per month. Registration of PF will be done once employee count is 20 and ESIC registration to be done when employee count reach to 10.

From India, Hyderabad
smitha-ganiga
@Kavipune Thanks for your valuable input
From India, Mumbai
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