Can We Split Minimum Wage into Basic and HRA for PF and ESI Deductions?

Dear All, I want to know if we can bifurcate the Minimum Wage into different heads of salary. Also, please clarify the following points:

- The Minimum Wage declared by the authority is the Basic salary.
- If the minimum wage is Rs. 4000, can we bifurcate it as Rs. 2000 Basic + Rs. 2000 HRA (or another head)?
- Can we deduct the PF & ESI on the Basic of Rs. 2000?

Please reply.

Thanks,
Ashok More

Dear Ashokmore,

Employer Deduction of HRA from Basic Pay

Does the employer deduct HRA from your Basic pay? If your rationale is fair, then why do you not give HRA as a percentage over and above the minimum wages? You are not the first person to think of such a move, to deny the workers their rightful share of PF and other benefits which are based on Basic Pay. Sorry to inform you that such exploitative moves are not only despicable but illegal as well. The minimum wage is the basic pay that a workman should get - you cannot bifurcate it further into 6/7/8 or more components and make it almost negligible, thereby denying them any benefit that is based on Basic Pay. If your intention is to make your bosses happy, I suggest kindly think of some good beneficial policy, which will help motivate employees; the kind of work for which HR professionals are hired by companies, unless you think otherwise i.e. HR's job is to find loopholes in the labor legislations.

Warm regards.