Subject: "Minimum Rates of Wages Shall Be the Basic Rate of Wages"
Punjab Government Notification No. S.O.6/C.A.11/1948/S.5/2012 dated 17.02.2012, inserting Note No. 10-A in the Minimum Wages Notification dated 06.01.2009 – Implication regarding.
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Dear friends, the Government of Punjab has issued a final notification bearing No. S.O.6/C.A.11/1948/S.5/2012 dated 17.02.2012, inserting Note No. 10-A in the Minimum Wages Notification dated 06.01.2009, which states as follows:
10-A. The minimum rates of wages so fixed by the Government of Punjab shall be the basic rates of wages.
Earlier, the State Government, via Notification No. S.O. 65/C.A.11/1948/S.5/2011 dated 14.07.2011, published in the official gazette on 22.07.2011, issued an intention notification of 2 months under clause (b) of sub-section (1) of section 5 of the Minimum Wages Act, 1948, inviting objections or suggestions from any person likely to be affected by the proposed amendment.
Implications:
In view of the said notification, the minimum wages shall be the basic wages, and there shall be no components forming part of minimum wages. It is observed that in some industries, employers used to pay their employees a wage packet comprising various allowances, which is equivalent to or slightly higher than the minimum rates of wages. Now, with this notification, all such wage packages have to be reconsidered and rearranged.
The said notification shall have long-lasting implications, both direct and indirect, on the take-home salary of the employee as well as on the annual benefits being enjoyed by them and also on the exchequer of the employers.
Different statutes define the term "wages" in different manners, such as the EPF & MP Act, ESI Act, Payment of Bonus Act, and Payment of Gratuity Act, etc. Consequently, employers and employees shall have to contribute more towards PF, in view of the present amendment terming the basic rates of minimum wages as basic rates of wages, thus the take-home salary of the employees would stand reduced to that extent.
Similarly, under the Payment of Bonus Act, the bonus is payable on Basic wages plus D.A. (if any), and so also under the Payment of Gratuity Act. The annual bonus and the gratuity payable to the employees will also be increased.
Date of Applicability of the Notification:
In view of sub-section (2) of section 5 of the Act, the above notification shall come into force on the expiry of three months from the date of its issue/publication. It may be added that when the minimum rates of wages were revised via notification dated 06.01.2009, it was specifically made applicable retrospectively from 01.09.2008. However, in the present notification, the date of applicability is not given. It is worth adding here that it is an accepted principle of interpretation of statutes, that unless a statute has been made expressly retrospective, it must be taken to be prospective. Thus, I am of the opinion that the present notification shall come into effect after the expiry of three months from the date of its issue/publication.
All concerned are requested to take note of the same and do the needful accordingly, so that there shall not be any violation of the Acts.
The copy of the above notification may be obtained from my office.
With regards
Punjab Government Notification No. S.O.6/C.A.11/1948/S.5/2012 dated 17.02.2012, inserting Note No. 10-A in the Minimum Wages Notification dated 06.01.2009 – Implication regarding.
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Dear friends, the Government of Punjab has issued a final notification bearing No. S.O.6/C.A.11/1948/S.5/2012 dated 17.02.2012, inserting Note No. 10-A in the Minimum Wages Notification dated 06.01.2009, which states as follows:
10-A. The minimum rates of wages so fixed by the Government of Punjab shall be the basic rates of wages.
Earlier, the State Government, via Notification No. S.O. 65/C.A.11/1948/S.5/2011 dated 14.07.2011, published in the official gazette on 22.07.2011, issued an intention notification of 2 months under clause (b) of sub-section (1) of section 5 of the Minimum Wages Act, 1948, inviting objections or suggestions from any person likely to be affected by the proposed amendment.
Implications:
In view of the said notification, the minimum wages shall be the basic wages, and there shall be no components forming part of minimum wages. It is observed that in some industries, employers used to pay their employees a wage packet comprising various allowances, which is equivalent to or slightly higher than the minimum rates of wages. Now, with this notification, all such wage packages have to be reconsidered and rearranged.
The said notification shall have long-lasting implications, both direct and indirect, on the take-home salary of the employee as well as on the annual benefits being enjoyed by them and also on the exchequer of the employers.
Different statutes define the term "wages" in different manners, such as the EPF & MP Act, ESI Act, Payment of Bonus Act, and Payment of Gratuity Act, etc. Consequently, employers and employees shall have to contribute more towards PF, in view of the present amendment terming the basic rates of minimum wages as basic rates of wages, thus the take-home salary of the employees would stand reduced to that extent.
Similarly, under the Payment of Bonus Act, the bonus is payable on Basic wages plus D.A. (if any), and so also under the Payment of Gratuity Act. The annual bonus and the gratuity payable to the employees will also be increased.
Date of Applicability of the Notification:
In view of sub-section (2) of section 5 of the Act, the above notification shall come into force on the expiry of three months from the date of its issue/publication. It may be added that when the minimum rates of wages were revised via notification dated 06.01.2009, it was specifically made applicable retrospectively from 01.09.2008. However, in the present notification, the date of applicability is not given. It is worth adding here that it is an accepted principle of interpretation of statutes, that unless a statute has been made expressly retrospective, it must be taken to be prospective. Thus, I am of the opinion that the present notification shall come into effect after the expiry of three months from the date of its issue/publication.
All concerned are requested to take note of the same and do the needful accordingly, so that there shall not be any violation of the Acts.
The copy of the above notification may be obtained from my office.
With regards