Minimum Wages [Thread 553474]

Dear Seniors,
I have one query or rather issue regarding the bifurcation of minimum wages. If somebody can help me out then that will be highly appreciated. My query is as follow:
Can basic salary of employee be lower than minimum wages, means can minimum wages be bifurcated in different heads like basic, hra and conveyance.
For e.g. if 8000 is minimum wages then can we bifurcate it as follow:
Basic: 4000
HRA: 2000
Conveyance: 2000
and then we pay PF only on Basic salary, i.e. on 4000 only rather than 8000. Is this allowed legally. If it is not allowed then is their any written recent notification regarding this.

Dear Maniish,

The controversy relating to apportionment of the gross or total wages equivalent to the minimum wages fixed under the MW Act,1948 into different components was put to rest by the Supreme Court in Airfrieght Corporation's case. What is very important is that the apportionment should not include the excluded items mentioned in the definition clause of "Wages" u/s 2(h) of the Act. In other words the sum total of the Industry Wages, whether apportioned into several components or consolidated, shall not fall below the sum total of the Minimum Wages at any point of time.

In the light of the universally accepted principle that fixation of industry wages is based on several factors like demand and supply of labour, the degree of unionisation of the labour force, the bargaining power of the respective partners of production, the apportionment of the gross wages into components is essentially the part of the collective bargaining agreement etc., and in the back-drop of the purpose behind the compulsory institution of Provident Fund, the sources of the contribution has to be strictly according to the EPF Act,1952 and shall not be based on any borrowed interpretation from some other legislation with a different purpose.