Insights on Salary Structure, Minimum Wages Act, and Pay Scales in Different Industries

Dear All,

Are there any strict rules regarding the percentage allocation of basic and other allowances in the salary structure? Additionally, is it possible to adjust the percentage of the basic salary?

Thanks and regards,
Sudha S

Dear Sudha,

Yes, there are pay scales under the Minimum Wages Act, and they vary from state to state. The reason for these pay scales is to provide fair wages to workers. You can modify your company's pay scale, but the condition is that it should not be less than the pay scale prescribed by the Minimum Wages Act.

Dear Sudha S,

The question is not clear. You have never mentioned the industry type. There are some rules on the percentage of every specification in the salary structure; however, it also depends on the state and industry you work with. Please do check the Minimum Wages Act, Factory Act, Shop & Commercial Establishment Act, etc.

Next time, please do post a detailed and informative question for the members to give you feedback.

Dear Sudha,

Greetings for the day.

First of all, I totally agree with Sachin that there are pay scales which are components of basic salary + DA/VDA under the Minimum Wages Act, and these vary from state to state. Secondly, there is confusion regarding the industry type for which you have asked the question.

Thanks & best regards,

Sumit Kumar Saxena

9899669071, 0120-4131277

Dear Sudha,

As our friends have rightly mentioned, we need to look for the industry type. Regarding the change in the salary structure, you can make changes, but there are conditions. They should not be less than the minimum wages. Also, if you have a system of deducting PF, then you can't reduce the Basic, DA, and the HRA. Any subsequent increase or decrease has to be adjusted in the Other or Special Allowance.

The best suggestion I can offer you is to go through the Minimum Wages Act; you will have most of your doubts cleared.

All the best.

Regards,
Shahaji

The salary structure normally varies between industries, risks involved, and also on the cost impact of the region involved. There should be a definite and measurable variation between the salary for different positions. This should provide career growth for employees with the aim in mind that they should be retained in the organization for the benefit of both.

Nowadays, no structured thinking and attempt is made, and no differentiation is made between the positions. A lot of incentives are given without due consideration. Organizations shall consider the present financial position and the possible growth as per their long-range plan. There is no question of simply paying salaries at certain levels just because other companies pay at those levels. This will result in unnecessary and meaningless duplication, which will definitely lead to adverse effects on management and subsequent deterioration.

There is an earlier ruling from the Supreme Court that any pay structure decided by the management should have the point of capacity to pay foremost in their minds. I have done quite a number of exercises in this line and am willing to share my ideas if contacted.

V. LOGANATHAN DIRECTOR SANMAGS CONSULTANTS

Dear Sudha,

Yes, it is there. Basic/DA/DA is fixed by the wage board every year based on CIN (Consumer Index Number) as per the Minimum Wages Act. Other allowances can change depending on the management's discretion by size, region, operation, policies, and procedures of the company.

Best regards, Chikkegowda N 9731388556

Dear All,

Thank you very much for your valuable replies. Sorry for not mentioning the industry type. Ours is a software company with 15 employees. As the number of employees is less than 20, we do not have PF deduction.

Regards,
Sudha S

Mr. Loganathan,

I would like to share the work you have done on wage structure. What is your email ID? How can I contact you?

B.R. Mohan
Bangalore

QUOTE=vlogu08@bsnl.in;1031265]The salary structure normally varies between industries, the risks involved, and also on the cost impact of the region involved. There should be a definite and measurable variation between the salary for different positions. This should provide career growth for employees with the aim in mind that they should be retained in the organization for the benefit of both. Nowadays, no structured thinking and attempt is made, and no differentiation is made between the positions. A lot of incentives are offered without due consideration. The organization shall consider the present financial position and the possible growth as per their long-range plan. There is no question of simply paying salaries at certain levels just because other companies pay at certain levels. This will result in unnecessary and meaningless duplication, which will definitely lead to adverse effects on management and subsequent deterioration. There is an earlier ruling from the Supreme Court that any pay structure decided by the management should have the point of capacity to pay foremost in their minds. I have conducted quite a number of exercises in this line and am willing to share my ideas if contacted.

V. LOGANATHAN
DIRECTOR
SANMAGS CONSULTANTS[/QUOTE]