Are Employers Skirting Minimum Wage Laws by Splitting Staff Salaries Differently?

Dear Seniors,

As far as I know, as per the Minimum Wages Act, the minimum wages defined for a particular state can't be broken into Basic/DA + Allowances. If it is X figure, it has to be paid in Basic + DA only. But does the rule apply for the staff employees of an organization? Because, as seen in some organizations, workers are getting the minimum wages as per the rule, but the salary of some staff employees is bifurcated in a way that the Basic + DA amount is even less than the minimum wages provided for the state.

Is it right to do this, or are the employers just taking advantage of it? Please clarify.

Regards,
Rahul

Dear Rahul,

Yes, you are correct, some employers are doing it and bifurcating minimum wages into allowances to save provident fund share and other benefits of employees. It should not be done, and the Supreme Court has given a verdict on it not to bifurcate wages to save PF. In the case of staff where the basic is less than minimum wages, it is totally illegal.

Thanks,
J.S. Malik