Understanding Monthly Wage Limits Under ECA: What's Included and Any Recent Changes?

Under the Employee's Compensation Act, 1923, the monthly wages limit has been enhanced from Rs. 4000/- to Rs. 8000/- with effect from 31/05/2010.

1. Is there any recent change in the ceiling on monthly wages?
2. Are the monthly wages only Basic + DA as per the Minimum Wages Act, or is it the Gross Salary (Basic + DA + HRA + Conveyance + Special Allowance + other allowances)?

Please clarify.

Regards,
R. Srinivasan
Mobile: [Phone Number Removed For Privacy Reasons]

Dear Srinivasan,

Query No. (1): Yes, for computing compensation.

Query No. (2): It consists of basic + DA/special allowance (or any allowance linked to the cost of living) + cash value of food concession, if any.

Regards,
B. Saikumar
HR & Labour Law Advisor
Mumbai

Thank you for your kind information. I want to know whether there have been any changes (amendments) in the ceiling of the salary (above Rs. 8000/-).

Compensation Calculation for Workman

In the case of a workman who is eligible for compensation under this act and receives a gross salary (for example) of Rs. 10,000 per month (Basic Rs. 3000, HRA Rs. 2000, CCA Rs. 3000, Conveyance Rs. 800, and Special Allowance Rs. 1200), what are the components that should be taken into account to calculate the compensation? Please explain.

Regards,
R. Srinivasan

There is no further change in the wage limit of Rs. 8000/- per month. Wages exclude:
a) Travelling allowance or the value of travelling concession,
b) P.F. and Pension contributions, and
c) Any amount paid to reimburse expenses incurred by the employee in discharge of his duties.

Regards,
B. Saikumar
HR & Labour Law Advisor
Mumbai