Confused About Salary Structure: How to Handle Basic and DA for Semi-Skilled Workers?

Hi all Cite HR members!

I am working in a pharmaceutical company, and we need to recruit workers in the semi-skilled category. I am a little bit confused about framing the salary bifurcation of the workers. I know that we cannot pay below minimum wages to them. I just need to know if the minimum wages should be a consolidated amount of Basic and DA. Can we keep the bifurcation in a way that the total salary bifurcation is above the minimum wages while keeping the basic at a lower rate?

Is it necessary to bifurcate the whole salary into BASIC & DA and deduct PF on minimum wages, or can we keep the basic & DA low?

Minimum wages fixed by the appropriate Government (State Government) in respect of the semi-skilled pharma employees shall consist of a Basic Rate and Dearness Allowance variable according to changes in the cost of living index. You can pay a higher basic, but you cannot fix a basic lower than that set by the Government. EPF is not concerned about bifurcated wages, but total wages/salary should be either a consolidated amount or basic salary + DA - whether fixed or variable.

Regards,

Madhu.T.K

Dear ARV,

You can refer to the notification by the state government for clarity on the Minimum Wages Act. It provides complete clarity in terms of BASIC, DA, etc., to be paid to the employee based on skill level and industry. You will have to adhere to the same. You are free to increase the amount, but as the act suggests, it is the minimum wage that the employee is eligible for.

Regards,
Arun

Hello Madhu,

First of all, thank you for your comments.

The minimum wage in Gujarat for the unskilled category is Rs. 105.20 per day. If we calculate the salary for 26 days, it amounts to around Rs. 2,735 per month. Does this mean we have to pay this amount in Basic & DA, and we cannot allocate it to other heads like HRA, Washing, or education allowance?

Another question is whether trainees are also covered under the Minimum Wages Act?

Additionally, are drivers classified under the semi-skilled or skilled category?

Thank you.

Dear All,

Could anybody provide the following data? I shall be very thankful to him/her:
Minimum wages in Gujarat, Karnataka, Tamil Nadu, Andhra Pradesh, Kolkata, Maharashtra.

Dear Arv,

Trainees other than those engaged as per the Apprentice Act, 1961, are covered under the Minimum Wages Act. This is to prevent employing personnel as trainees with a view to deterring their rights under any labor legislations. Until recently, all trainees other than apprentices were covered by EPF as well. However, with the verdict of the Supreme Court on Campco's case, all trainees are exempted from EPF. Nevertheless, no such ruling has been reported from ESI.

The categorization of employees as Skilled, Semi-Skilled, and Unskilled depends upon the respective notification and may not be uniform all over India. Therefore, the interpretation of the category of drivers shall be done judiciously.

The special allowance shown in Maharashtra Minimum Wages will be replaced by Variable DA in Kerala, where the VDA will change according to changes in the cost of living index, which in turn will be notified by the Bureau of Economics and Statistics.

Regards,
Madhu.T.K

The categorization as above relates mainly to technical staff. Therefore, those employees who have attained basic training in the respective field from any Industrial Training Institute or Polytechnic or College but without any work experience shall be regarded as Semi-Skilled, and those who have gained experience besides having undergone formal education/training shall be taken as Skilled. Obviously, those having no formal education and are engaged to help a skilled/semi-skilled worker shall come under unskilled workmen. Generally, in technical lines, like Machinist, Turner, Welder, Fitter, etc., where promotion cannot be given to higher posts, companies upgrade their category to mark promotion. As such, those who have experience within the organization shall be given Highly Skilled grade.

In any case, support required from the Supervisory staff for an employee to do the work assigned to him is the yardstick to decide whether he is unskilled, semi-skilled, skilled, or highly skilled.

Regards,

Madhu.T.K

Hi,

Could someone please provide me with the rates of Special Allowance (Variable DA) applicable to Shops & E-Commerce Establishments in Hyderabad for the period 01.04.2008 to 30.09.2008 (Andhra Pradesh)?

Thanks,

AJIT DESAI, Pune

Please provide the minimum wages of training institutes in West Bengal, Uttar Pradesh, Tamil Nadu, Rajasthan, Maharashtra, Punjab, Assam, Karnataka, Jharkhand, Gujarat, Delhi, and Andhra Pradesh.

Thank you.

Respected sir, we are a Payroll outsourcing company in India. We pay the basic according to the minimum wages. Can we fix a lower basic and increase the other allowances so that the net salary can be on the higher side? Does it affect the PF office? Is this legal? Is there any notification for the same? If yes, then please provide it to us.

Subject: Can a Trainee in the Paper Manufacturing Industry be Protected with Minimum Wages.

While the contract for unskilled workmen includes protection with minimum wage, trainee workmen with technical or educational qualifications are not receiving minimum wages at APP Mills Ltd, RJY. How can justice be served for these trainees?

M.S. Narayana, RJY

If such trainees are engaged following the Apprentice Act or as per a separate provision in the Certified Standing Orders of the company, then they will only be considered as apprentices or trainees, and as such, they will not come under the Minimum Wages Act. On the other hand, if they are not registered with the Related Instruction Centre as per the Apprentice Act but are engaged just with a designation as "trainees," then they will definitely be entitled to get minimum wages. If the minimum wages notification applicable to your industry does not specify wages for trainees, then the lowest wage rates should be made applicable to them.

Regards, Madhu.T.K

Dear all, we can bifurcate the minimum wage, but as far as EPF calculation is concerned, it will be based on the minimum wage decided by the state government as it includes only basic and DA.

Regards, Ved Bawa

Hi all, can anyone tell me the minimum wages for a peon in Gujarat? We are registered under the Shops and Establishment Act.