How Should We Adjust Our Salary Structure After the New Minimum Wage Update in UP?

Salary Structure Update Inquiry

I am working in an NGO in Uttar Pradesh as the Manager of HR, but all the salary-related calculations are handled by a CA. Until November, our salary structure was as follows:

- Basic: 40% of gross
- DA: 20% of basic
- HRA: 40% of Basic + DA
- Transport allowance: 800
- Others: Rest adjusted amount if any

My question is, after the update in minimum daily wages as per the UP Act, what changes should we incorporate, and how will this change affect the previous salary structure?

Kindly help me out.

Regards

Steps to Update Salary Structure

1. Prepare a salary structure sheet if you do not have one. The sheet should contain all designations available in your company, organized by grade.

Example of a salary structure sheet:

- Grade 1: Executive 1 - salary 5000 (inclusive of HRA/basic/conveyance allowance, etc.), Executive 2 - salary 6000 (inclusive of HRA/basic/conveyance allowance, etc.)
- Grade 2: Senior Executive 1 - Salary 7000 (inclusive of HRA/basic/conveyance allowance, etc.), Senior Executive 2 - Salary 8000 (inclusive of HRA/basic/conveyance allowance, etc.)

2. Check the percentage increase in the minimum wage that has occurred.

For example, if the minimum wage has increased by 3%, incorporate that change into your salary structure sheet. Increase the salary by 3% for all designations, and accordingly, revise basic/HRA/Transport Allowance, etc.

This process is required to keep the company's salary structure updated. You can limit this change for senior positions since they usually receive a higher salary. If you incorporate this change in their salary structure as well, it will increase the cost for your company.

This must be done specifically for those working at lower grades so that they do not fail to receive the minimum wage as prescribed by the state government.