Minimum Wage Dilemma: Should We Follow Local State Rates or Stick to Haryana's?

Hi Seniors, I need your guidance in understanding the minimum wage case. We are a company of 400 employees with a head office in Gurgaon, Haryana. 80% of our workforce are field workers working in different Indian states such as Karnataka, Kerala, Tamil Nadu, Andhra Pradesh, etc. We make and disburse the salaries of all the employees from the Head office in Gurgaon, and we follow the minimum wages for Haryana for all employees working in different locations in India. We have project offices at different locations that we wind up once the project is completed.

I just want to check if we need to consider the minimum wages of different states when making salaries for employees working in those locations, or if we can follow the Haryana minimum wage for all.

Looking forward to your replies.

Regards, HRbuff

You have to pay the minimum wages of the state where the workers are working or higher if the company chooses to do so.

Thank you!

Dear,

I think that wages will be disbursed as per state-wise regulations, and you have to follow the minimum wage of the same state in which the workers are employed on the project.

Understanding Minimum Wages Across States

The Minimum Wages Act falls under State Government jurisdiction. You should follow the pattern applicable to the state where the employee is being deployed. Also, note that the Minimum Wages structure can vary from state to state. In some states, D.A. is a mandatory part of Minimum Wages. However, in Delhi, there is only a single Basic Minimum Wage. In Maharashtra, HRA is also a part of the Minimum Wages. Please take care of this point because PF is deducted on DA as well. If an employee is working in multiple states, the minimum salary should be on a pro-rata basis.

Since you have a large number of field workers, even if they are covered under ESI, it is advisable to have some Group Insurance-Mediclaim Policy as well to provide them with Social Security coverage. Hope you will find the observations in line; senior members, please correct me if any corrections are required.

Thank you.

Thank you, Sirs, for your valuable comments on this subject. Just to highlight, we are a project-based company, and we send our employees to various states (locations) on deputation for project purposes. Once the project is completed, they are required to return to the Head Office (Gurgaon) if there is no new project or to other locations as per project requirements.

Given these circumstances, how can we track minimum wages based on the movement of the engineers? Can't it be demonstrated that these engineers are on deputation for a specific period for project requirements?

Regards,
HR Buff

As stated by you, the employees (engineers) are kept on rotating in different states as per your project requirements. Since they are engineers and not unskilled/semi-skilled labor, in my opinion, the salary of these engineers should be above the Minimum Wages scale.

Minimum Wages and Salary Structure

Minimum wages are defined to cater to the minimum living standards of employees. It is better to have a system based on the Minimum Wages of different states. Define the salary structure in such a way that it meets the highest Minimum Wages.

By doing so, you would not need to worry about the Minimum Wages because wherever the engineers work, their salary will be higher than the Minimum Wages. However, for cost control purposes, you can revise their salaries according to revisions in the Minimum Wages Notifications.

Moreover, there would be a proper platform for calculating other statutory requirements. The salary structure will remain the same for calculating PF-ESI, Bonus, Leave, Gratuity, OT, etc.

I hope this meets your requirements. Fellow members can provide further insight if any corrections are required.