Is It Allowed to Split Minimum Wages? Seeking Clarity on Wage Regulations

Please let me know if it is permissible to split Minimum Wages. Thank you.

Understanding Minimum Wage Notifications

Every state issues a notification every six months regarding their minimum wages. The notification generally states that it covers Basic, or Basic + DA, or Basic + DA + HRA. In any of these cases, minimum wages will be considered only to the extent covered above.

For example, if you have a minimum wage of 5500, and your Basic + DA is 2500 while the gross is 6000, you will be considered violating the act and will have to pay the difference, even though you have actually paid higher than the minimum wages notified.

Hope that helps.

As per the circular from the PF office, it is not allowed to split the minimum wages for PF contribution.

Regards,
[Phone Number Removed For Privacy Reasons]

As per the case of Airfreight vs. State of Karnataka in the year 1999 in the Honourable Supreme Court, it is held that if you are paying the overall wages above the minimum wage, then it is not illegal if the break-up of Basic salary and D.A. as prescribed by the Minimum Wages Act is not followed. You may refer to the below link to read the judgment:

Airfreight Ltd. vs State Of Karnataka & Ors. on 4 August 1999

Regards,
Kuldeep Singh

The high courts, from what I understand, only struck down the PF circular on the grounds that the PF department is not concerned with minimum wages. It's the state government that has to act. So, I think the matter is not settled yet and may come back to bite...

My concern with Saswata Banerjee is that the PF department is concerned with the minimum wages, although it falls under the jurisdiction of the state government. However, the basis of EPF deduction is solely on the minimum wage of that state. Also, please note that the basic wage cannot be less than the minimum wage of the state.

Thanks & Regards,

Sumit Kumar Saxena

In UP, the Minimum Wage (MW) is 4525, split as Basic-2600 + VDA-1928 = 4528. Now, I am giving my workers 2900 as Basic + 1650 as HRA & Conv Allowance. Since the Basic decided by the government is 2600 and I'm paying more than that, please tell me where I'm wrong.