Does Our Hotel Follow the Right Labor Laws and Pay Scales in Delhi? Seeking Guidance

Dear Seniors, I have recently joined a 3-star hotel in Delhi as an HR Manager. Here we are giving 15 CLs and 15 PLs to all employees. But I believe the leaves are entitled as per law, whether the company comes under the Factory Act or the Delhi Shop and Establishment Act. Please guide me on whether the hotel would come under the Factory Act or Shop and Establishment Act?

Wage Concerns for Kitchen Staff

One more doubt: Here we are paying the kitchen staff as per minimum wages (for unskilled workers), i.e., Rs 5278. Is this correct? And if someone has graduated, will the scale change accordingly? Should we pay them Rs 7020?

Please suggest.

Regards

To answer your first question, it is the Shops and Establishment Act.

To the second question: no idea.

Dear Komal,

Minimum wages are always paid based on the category of work a person is doing, not on the basis of his/her qualification. Suppose a person is doing some unskilled job, then he becomes a graduate; it doesn't affect the nature of his work. So, he will get paid as per his category, i.e., unskilled, semi-skilled, skilled, or highly skilled.

It comes under the Shops and Commercial Establishment Act.

CL- 12
SL- 12
PL- 12 (After one year)

Dear Komal,

The hotel industry is covered by two acts. The manufacturing/production area falls under the Factories Act of 1948, while the serving area is regulated by the Shops and Establishments Act.

Regards,
Rajendra Prasad

Leave Entitlement as per the Act

In Delhi, according to the Shops and Establishments Act, you should provide 15 Privilege Leaves (PL) and 12 Casual Leaves (CL) annually. An employee who has completed a period of one month in continuous service is entitled to not less than one day's casual leave. The PL should not be credited in advance at the beginning of the financial year. Since this is earned leave, it becomes due only after working. In each financial year, depending on attendance records, PL shall be credited at 5 days for every four-month cycle on 1st August, 1st December, and 1st April.

With reference to your query, the number of leave days differs from one company to another based on company policy and in accordance with the law. PL (Privilege Leave) will be 15 days (equivalent to 1.5 days for every 20 days worked), CL (Casual Leave) will be 12 days, and SL (Sick Leave) will be 7 days.

The company management has the flexibility to design the leave policy according to their specific requirements and working procedures.

Thank you.

1. Is it mandatory to get registered for all the offices under the Shops and Establishment Act.

2. Can you please inform me which is the office/location that handles registration in Delhi for the Shops and Establishments Act.

Thank you,

Dear Mr. Komal, all hotels and restaurants come under the Catering Establishments Act. I recommend purchasing a Catering Establishment Act book to determine leave entitlements as per the act. Regarding the Minimum Wages Act, wages are calculated based on the employee's designation. By referring to the Minimum Wages Act for Delhi, you can find specified wages for different positions. You should select the appropriate wages for the kitchen staff from there. The employee's educational qualifications, such as holding a degree, do not impact the wage scale.

Regards,
P. Karunakaran

For purposes of PF, the Basic + DA should not be less than the prescribed minimum wage.

Vasant Nair

Hotel comes under the category of Shops and Establishment Act.

The criteria for minimum wages are based on the nature of work being performed by the person and not on the basis of qualifications and experience of the individual.

(Dinesh)

Dear Mr. Prasad,

Unless the food is made and supplied to other places like air kitchens, it may be covered under the Factories Act. However, all hotels and restaurants are covered under the Shops & Establishment Act only.

Regards,
Rajendra Prasad