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Hi All, Can you please let me know the recent salary structure applicable as per the law in India?
From India, Bengaluru

In India, the salary structure is governed by various laws and regulations that have been put in place to protect the rights of employees and ensure fair compensation for their work. As an employer, it is crucial to be aware of the recent salary structure applicable in India to avoid any legal repercussions and ensure compliance with the law.

The recent salary structure in India is primarily governed by the Payment of Wages Act, 1936, Minimum Wages Act, 1948, and the Code on Wages, 2019. These laws lay down the minimum wages that must be paid to employees based on factors such as the type of work, location, and industry. Employers are required to pay wages that are not less than the prescribed minimum wage to ensure that employees are fairly compensated for their work.

The Payment of Wages Act, 1936, mandates that wages must be paid in legal tender or through electronic transfer and within the specified time period. The Act also prohibits any deductions from wages except those that are authorized by law or agreed upon by the employee. Employers must maintain accurate records of wages paid to employees to ensure transparency and compliance with the law.

The Minimum Wages Act, 1948, sets the minimum wages that must be paid to employees in various industries and occupations. The Act aims to prevent exploitation of workers and ensure that they receive a fair wage for their work. The minimum wages are revised periodically by the respective state governments based on factors such as inflation, cost of living, and economic conditions.

The Code on Wages, 2019, which came into effect on August 8, 2019, aims to streamline and simplify the existing labor laws related to wages and ensure uniformity in wage payments across all sectors. The Code consolidates and rationalizes four existing laws related to wages and provides for a universal minimum wage that applies to all employees, regardless of their location, occupation, or industry.

Employers in India are required to comply with the recent salary structure applicable as per the law to avoid any legal consequences. Failure to pay employees the prescribed minimum wage or make timely wage payments can result in penalties, fines, or legal action. It is essential for employers to stay informed about the latest developments in labor laws and ensure that their salary structure is in compliance with the law.

In conclusion, the recent salary structure applicable in India is governed by various laws and regulations that aim to protect the rights of employees and ensure fair compensation for their work. Employers must adhere to the minimum wage requirements, payment deadlines, and other provisions laid down in the relevant laws to avoid legal repercussions and maintain a harmonious work environment. Staying informed about the latest developments in labour laws and seeking legal advice when necessary can help employers ensure compliance with the law and uphold the rights of their employees.


From India, Bangalore

There is no standard salary structure in India. The law relating to wages only speaks about how much salary/ wages should be paid to each category of employment. It only says about a minimum amount and the responsibility of fixing the minimum wages is on the state government. Therefore, each state shall have different minimum rates of wages and the component of that wages shall also differ from state to state. As such when majority of states follow a pattern of basic wages and dearness allowance variable according to changes in the consumer price indices (CPIs), there are a few states which includes a certain percentage of basic salary being house rent allowance as part of salary structure. Some states have allowance to compensate cost of living in cities,ie, city compensatory allowance as part of minimum wages. In some states in the place of dearness allowance the word used is special allowance. That means there is no uniformity even in the structure of salary in India. Even in the new labour codes (which remains unimplemented and and not going to be implemented for the reason of some technical faults in its drafting) there is no uniformity sought and the state governments are still empowered with the duty of fixing wages of the respective scheduled industry.

The matter is any way not the point of discussion here. The discussion is how salary shall be structured legally. The salaries of many categories of employees are much above the statutory minimum wages. It is based on the statutory wages only in respect of workmen and that also in such establishments where they are not represented by any trade union for their collective bargaining. In establishments which are paying higher than minimum wages, whatever structure you follow will be acceptable and the law does not make it mandatory that employer should follow the exact structure of basic wages and dearness allowance as discussed above. In Airfright case the Supreme Court has said that so long as the employer is paying more than minimum wages fixed by the government, there is no need to have a component called dearness allowance in the salary structure. This permits the employer to have salary components that he likes. It is even okay that out of the total salary you keep the bare minimum as basic salary and the maximum on such components which are excluded from statutory contributions and payments like PF, ESI, Bonus or gratuity.

But my advice is that you should not ignore completely the wages structure as per law, ie, minimum wages notified by the state. If you do not have a dearness allowance in the salary structure, then the basic salary should be an amount equal to the total of notified wages, ie, basic wage and dearness allowance. It should be on that basic wages that you should calculate the amount payable by the employer towards PF, bonus, leave encashment or gratuity. Any amount over and above the statutory salary shall be put under any head which will not attract statutory contributions of the employer. In respect of highly paid employees whose income are subject to tax deduction, there can be reimbursements and other tax benefits.

From India, Kannur
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