WayanadanDear Seniors, We have employed a contractor for plant operation. We are working on 5 days in a week, Saturday and Sunday off.
To check whether the contractor paying monthly minimum wages, I want to know how to calculate it.
Now the central minimum wage at our place for highly skilled is Rs. 897/-.
If the working days in a month is 20 days (after deducting Saturday, Sunday & other holidays)
the monthly minimum wage will be 20 x 897 = 17,940. Or is it necessary to take 26 days
for the calculation?
Madhu.T.KWhy are you taking Central Minimum Wages? Don't you have state notification for your scheduled industry?
Normally, the notification shall provide for monthly rate as well as daily rate. The daily rate, if not given separately, is arrived at by dividing the monthly rate by 26. If you take that daily rate, the issue will be solved.
Please note that the rate per day should be inclusive of dearness allowance.
From India, Kannur
KK!HRWhen the employee has worked on all the working days in a month, then the employee is entitled to a full month's salary. The notification of minimum wages indicates the monthly wages and the daily wages (by dividing the monthly wage by 26). A practical way to compute wages is to pay the monthly minimum wage amount for full attendance and for absent days deduct daily wage rate for each such day.
From India, Mumbai
WayanadanThank you Madhu.T.K sir for your reply.
Since we are under central government department we follow central minimum wage and central circular provides daily rate.
So if I take daily rate, the calculation will be no. of days worked multiplied by central minimum wage daily rate, is this correct?
Also this central minimum wage is changing in every April & October of the year, so contractor has to pay the hiked amount, irrespective of contract start date. Is this also correct or not?
WayanadanSir Is there any educational qualifications are specified or fixed for the category of workers, namely Highly skilled, skilled, semi-skilled and non skilled?
Madhu.T.KThe Notification shall provide for a basic wage and a dearness allowance which varies with changes in the CPI. Since the CPI is notified every April and October (in some states it is notified every three months also) the Variable DA will change in April and October. When the VDA changes, you can demand the revised wages from the principal employer. The agreement shall never be for a fixed wages through out the contract period but it should be on the basis of notified wages plus a service charge. Therefore, whenever the notified wages changes, you should pay it to your workers and demand it from the principal employer.
If the minimum wages per day is not available in the notification you can take the wages per month and divide it by 26 to arrive at daily rate of wages and then pay it depending upon the days worked by the employee.
There is no educational qualification prescribed for different categories of employees but the skill possessed by each worker together with educational qualification will decide whether a worker is unskilled, semi skilled, skilled or highly skilled. Accordingly, a worker who can do the assigned work without any supervision may fall under highly skilled or skilled, a worker who occasionally requires guidance from others may be put under semi skilled and a worker who cannot work without supervision shall be under unskilled. Under technical works, like turner, welder, machinist etc, this categorisation is more easy and depending upon the worker's experience, accuracy in doing the work, ability to read the mechanical drawings etc you can categorise the workers as skilled, semi skilled and unskilled. Obviously, a worker possessing no trade knowledge or having no technical educational background (say, ITI) who is engaged to help a turner or a machinist is an unskilled worker. The decision can be taken by the employer. Naturally, a skilled worker will demand higher salary and the employer cannot deny it by putting him under 'unskilled' and saying that you are under unskilled. If the employer does so, the worker will not be available for work tomorrow!
From India, Kannur
KK!HRThe minimum wages notification issued by the Central Government lists the industry-wise details of jobs constituting Unskilled, Semi-Skilled, Skilled, and Highly Skilled Categories. The rules also have defined these terms, so it can be used to determine the category of any unlisted job.
From India, Mumbai
nanu1953CPI is published by Shimla Labor Bureau every month for most of the major cities all over India. The base year has been changed with the years to go - 1960 = 100, 1982 = 100, 2000= 100 etc.
DA/VDA is calculated based on changed of CPI and which is revised may be monthly, quarterly, six monthly or yearly. Many private organizations have different DA scheme along with minimum wages DA scheme. In the whole process there are two things - Index month (s) and Payable month (s). Neutralization of Index is done by usually per point neutralization or by % method or any other innovative formula.
Minimum wages whether States or Central usually revised six monthly April & October or January & July. Every States and Central Minimum wages have fixed index months and payable months. Six months average from previous six month average is the increase or decrease. The difference of index is neutralized by per point of index neutralization or % method.
Usually index are published after one and half to two months late. Accordingly Minimum wages or Private/Govt. organizations where DA is prevailing are revised accordingly. One example is given below:-
INDEX QTR PAYABLE QTR
JAN, FEB, MAR JUNE, JULY AUG
APR, MAY, JUNE SEPT, OCT, NOV
AND SO ON for any qtrly DA review system.
S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions
+91 98310 81531
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From India, New Delhi