Confused About Minimum Wage in Uttar Pradesh: Is It Before or After Deductions?

Hello Everyone, Greetings of the Day! I have a query regarding the minimum wage of Uttar Pradesh. Are the minimum wages (Basic + DA) termed as such, or is the net earnings after statutory deductions termed as the minimum wage? I am confused because a consultant mentioned that the net wage, after all deductions, should be considered the minimum wage in the state of UP. I need clarification on this issue, and I would appreciate your valuable input.

Thank you.

Not on net salary. Please refer to The Minimum Wages Act, 1948, Section No. 2 (H).

Definition of Wages

(h) "Wages" means 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 of work done in such employment, and includes house rent allowance, but does not include:

(i) The value of:
- Any house-accommodation, supply of light, water, medical attendance, or
- Any other amenity or any service excluded by 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.

Regards.

Dear Abedeen,

There are two separate points you have raised, one is under the Payment of Wages Act and the other is the Payment of Minimum Wages Act.

Payment of Minimum Wages

1) Payment of minimum wages explains that you can't pay any workman less than that. Secondly, the basic rate can't be kept less than minimum wages, which are revised from time to time by the state government, i.e., there is no need to pay DA separately; merge it with the basic. As far as statutory deductions are concerned, deduction of EPF can be done through it, computation of bonus, gratuity can be done on the basis of minimum wages (basic + DA).

Payment of Wages

2) As far as the payment of wages is concerned, it consists of various components of the salary, namely HRA, Conveyance, and other Allowances, including basic salary. Only ESIC deduction can be done on the same, and leave encashment payment is done on the same.

The net payable is the payment received after deductions of various liabilities such as EPF, ESIC, TDS, Advances, etc., and it can only be possible after the finalization of salary and wages.

Thanks and Regards,

Sumit Kumar Saxena