Are IT Companies Exempt from Minimum Wage Laws When Working in Construction? Seeking Guidance

In our organization, we follow the rate of minimum wages prescribed for industries under Construction of Road & Building constructions (central rate). All the contractors who are into production and support services adhere to the rate stated above, as per government norms.

The problem arises mostly with companies working under the ERP department and those dealing with tasks like Data Centre support, Networking, Software Development, SAP system installation, etc. Renowned companies are engaged for such work, deploying their own manpower or third-party manpower at our premises for the execution of these jobs.

As far as my knowledge goes, any contractor who deploys manpower in our factory should ensure their workers/employees are paid minimum wages as per the rates of the government notification (central) for industries under Construction of Road & Building operations, which is applicable to our industry.

IT companies working in our organization and deploying manpower are paying salaries/wages according to their own structure, which in some cases are lower than the notified rate for our industry (which falls under Construction of Road & Building operations, etc.).

According to their logic, they do not fall under the scheduled employments of the Minimum Wages Act, and there is no specific notification on the minimum wage for IT companies at either the central or state government (West Bengal) level. Therefore, they have their salary structure and are not liable to pay the rate of minimum wages that our industry follows for deploying manpower at our premises.

Guidance solicited.

Regards,
DG

Minimum Wages Compliance for IT Companies

If you are scheduled for employment as per the Minimum Wages notification, all employees, whether employed directly by you or engaged through a contractor, should be paid wages as per the rates prescribed for your industry. If employees of an IT company are engaged to do any work, they should be paid wages according to your industry, and the contractor cannot absolve themselves from paying it on the grounds that IT companies do not have a separate minimum wages notification. I am not sure about West Bengal, but in some other states like Kerala, there are separate notifications for IT companies.

If the contract is for a service, such as the installation of SAP, where you do not have any control or supervision over the individuals and the number of individuals who come for work, nothing above will apply because this is not a contract of service but a contract for service.

Regards,
Madhu.T.K

Minimum Wage Compliance for Principal Employers and Contractors

Minimum wage is applicable for all principal employers as well as contractors. It is the principal employer's duty to ensure that contractors are paid accordingly with the minimum wage.

Regards,
Ajay Bisht
Manager HR (Hospital)
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