Can Our Company Set Its Own Wage Structure Above Minimum Wages? Seeking Advice and References

Hi Friends, I have an issue to discuss. According to the minimum wages act, for a semi-skilled workforce, the gross salary is Rs. 4500/- and we pay Rs. 5000/- as gross salary. In this scenario, can the company have its own wage structure for the employees? If yes, could anyone please help with the notification or any case for reference.

As far as enforcement of minimum wages is concerned, an employer is said to follow minimum wages if the total (gross) wages paid are not less than the minimum wages. Usually, it is composed of a basic wage and a Dearness allowance. But if the employer has a different structure and the total of wages under all the heads taken together is equal to or more than the minimum wages, he can do so.

However, if the basic wages are low and the other parts of the salary, i.e., HRA and Conveyance, are high, then there will be an apprehension that there is an attempt on the part of the employer to reduce his burden of Provident Fund contribution since it is from Basic salary alone that PF is deducted. Though the Provident Fund Organisation is not empowered to enforce minimum wages, there is every chance of such linkage in a very short time.

Regards, Madhu.T.K

Thank you, Madhu, for the advice. I am aware of this point but had this issue in our company. As we are paying over and above the minimum wages, I am not keen on changing the salary structure. Can anyone else shed some light on this, and if there is any judgment in favor of this, can it be helped with.