Confused About Salary Structure Changes with Minimum Wage Revisions? Need Advice!

ranjit0101
Dear friends,

I am a little confused about the salary structure of my company. We are paying every employee more than the minimum wages, keeping the basic salary as the minimum wage and the balance amount as other allowances such as HRA and Conveyance. The problem arises when the minimum wages are revised by the State Governments. We do not increase the salary; we only change the components of the salary, for example, from HRA to basic or Conveyance to basic or LTA to basic.

Please, can anyone suggest to me if we are doing something wrong or not?

Thanks,
Ranjit
9818758445
R.N.Khola
Dear Ranjit,

In my opinion, you are going down the wrong path. This type of change attracts Section 9A of the Industrial Disputes Act, 1947. Such a change is considered to be included in the matters outlined in the Fourth Schedule, which requires a 21-day notice to be given to the affected employees before implementing such a change.

Regards,
R.N.Khola
ranjit0101
Dear Mr. Khola,

In one point, I agree with you, but there is not any kind of pay structure where all the components are connected to the basic salary. So, please guide me, is there any guideline as per the Payment of Wages Act or other acts.

Thanks,
Ranjit
R.N.Khola
Dear Ranjit,

Which is the one point on which you agree with me? In your original post, you have mentioned that you are taking the amount from the HRA head and adjusting it with the Basic to come to the minimum wages rate. Increasing salary in any account head is not objectionable, but decreasing the amount in any other head is contrary to the law. If the employed person is entitled to relief under the Payment of Wages Act, 1936, then in my opinion, no deductions from the wages fixed by the employer are permissible except those given under section 7.

Regards,

R.N.Khola
shah81
Hello All, In my organization, the minimum gross salary is 5000 (Basic 4724 + HRA 236 + Other 40 comes to gross 5000). Since there is a change in wages, my Basic will increase to 5400, and the gross will also hike up. Is there any solution where I don't have to change the pattern of the breakup whenever such changes happen from the government?

Actually, we have recruited 10 trainees this month with a gross salary of 5000 per month, and now I have to change their gross to 6000 without evaluating performance.

Regards, shah81
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