Hi Everyone, Recently, Delhi's Minimum Wage is 17232/- for unskilled employees.
So can we segregate the minimum wages into allowances like basic, Da, HRA or any other allowance?
Basic +Da should be the minimum wages. Because we have heard lots of communication regarding minimum wages structure. Somebody describe that Basic and DA should be equal to minimum wages. Or somebody says Basic, Da and HRA can be minimum wages.
What should be as per delhi minimum wages act.

From India, Chandigarh

In 1999, the Supreme Court in Airfreight Ltd Vs State of Karnataka had ruled that if you are paying salary in total more than the minimum wages, there is no need to look into the components like Basic and DA. That verdict permits bifurcation of salary into various components like as you said HRA, Conveyance and other allowances. What is to be ensured is that the total of these allowances should be equal to the statutory minimum wages fixed, say, Rs 17232.

However, for deciding the payments like, bonus, leave encashment, contribution to EPF, and payment of gratuity also you should take the consolidated salary. You can not then take just the basic pay alone. The amended Bonus Act also says that it should be payable on minimum wages. The EPF has clarified that PF contributing salary should be the total salary and, of course, in the case of a salary above Rs 15000, it can be limited to Rs 15000 but you cannot make it payable on the basic pay that you fix. Similarly, at the time of leave surrender calculation, you should take the salary equal to minimum wages not the basic alone. The same principal shall apply to calculation of gratuity.

In view of the above, it is to be accepted that in the case of wages within the scope of Minimum Wages Act, the same should be Basic wages and DA. Any amount exceeding the notified wages shall be put under any component that you like. This would avoid confusions in fixation and protects the employer from legal battle.

From India, Kannur
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