Can Minimum Wages Be Split into Basic Pay and Allowances? Seeking Clarification

Dear Sirs,

Could you please inform me if the minimum wages can be divided into basic and allowances?

Best regards,
PG

Dear PG,

As far as I know, the term "Minimum Wages" suggests that the wage/salary is the minimum net payment you make to your employee. In other words, irrespective of the compensation category it is paid in, the net amount must not be less than the mandatory Minimum Wages issued by the Government from time to time.

Hope this clarifies your query.

Warm Regards,
Samba Siva.

Minimum wages are bifurcated into basic and D.A.

Dear Sirs,

Please inform me, can the minimum wages be bifurcated into basic and allowances.

Best regards,
PG

Dear All,

I want to clarify the definition of wages under the Minimum Wages Act.

"Wages" mean all remuneration, capable of being expressed in terms of money, which would, if the terms of the contract of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment or work done in such employment and includes house rent allowance.

Please note that wages do not include the value of:
(a) any house, accommodation, supply of light, water, medical attendance, or
(b) any other amenity or any service excluded by a general or special order of the appropriate government;
(ii) any contribution paid by the employer to any pension fund or provident fund or under any scheme of social insurance;
(iii) any traveling allowance or the value of any traveling concession;
(iv) any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment; or
(v) any gratuity payable on discharge.

(Source: http://labour.nic.in)

Regards
Rajesh Joshi

Dear PKG,

The Minimum Wages have taken care of Basic Pay, Dearness Allowance, House Rent Allowance, and other allowances. It is the responsibility of the concerned State Government to declare the Minimum Wages for different types of industries and different categories of employees. However, there is no law on the bifurcation of the Minimum Wages. In practice, we always split the Minimum Wages as follows:

- Basic Pay & DA: 60% of Minimum Wages
- House Rent: 25% of Minimum Wages
- Conveyance Allowance: 15% of Minimum Wages

I hope this will satisfy your doubts.

Best regards,
Vijay Gaonkar

Hey, let me define, please correct me if I am wrong.

Minimum wages vary from state to state; it also varies based on the class of employee and can be categorized in a few manners, e.g., Skilled, Semi-Skilled, and Unskilled. Sometimes it has been seen that it also varies based on the nature of the business of a company.

For example, in Maharashtra, for a Chemical Company, it's Rs. 3258 (whereas three categories of locations have been defined, where this amount varies) and it includes Basic+DA and a minimum 5% HRA (if given); other allowances can also be added.

Hi,

The minimum wage is the bare minimum earning that every employee should receive. Please note that you cannot bifurcate it under different heads. The basic wage should be equal to or more than the minimum wage in every case.

Hope this is clear.

Thanks,
Hitesh

Dear Hitesh,

Just to enlighten you on the subject, the Minimum Wages can be bifurcated into various heads, as long as the bifurcation is done within the meaning of "WAGES", i.e., Basic, DA, HRA, etc. Hope you will now be wiser in computing a salary structure.

Regards,
Prashant Das