Confused About Wage Definitions? How to Address Compensation Issues with Employers

I would like to seek advice regarding the exact meaning of "Wage." Few employers are wrongly addressing the term, and it is affecting the compensation of an employee. For example, in some organizations, they consider the "Gross Amount as Wage" and deviate from the minimum wage rule. According to the Minimum Wages Act (MWA) for unskilled employees in Odisha, the wages should be ₹5265 (202.50 * 26). In my opinion, the basic pay of an employee in this category should be ₹5265. However, employers argue that the gross amount should be ₹5265. They claim that the definition of wage varies from one act to another, such as the PF-1952 Act and the Minimum Wage Act.

I would appreciate your advice on how to address this issue with them effectively.

Sincerely, [Your Name]

Understanding the Definition of "Wages"

There is no doubt that the definition of "wages" varies from act to act. As such, when you refer to some issues, you have to check the definition of wages in that particular act. Wages are fixed regular payments earned for work or services, typically paid on a daily, weekly, or monthly basis.

Wages Under the Minimum Wages Act, 1948

The wages under the Minimum Wages Act, 1948, mean all remuneration capable of being expressed in terms of money and include HRA.

The minimum rates of wages are fixed or revised by the appropriate government in respect of scheduled employments. The wages may consist of:

(i) A basic rate of wages and a special allowance to be adjusted at intervals in the form of a cost of living allowance/index.

(ii) A basic rate of wages with or without the cost of living allowance and cash value of concessions in respect of supplies of essential commodities at concessional rates.

(iii) An all-inclusive allowance for the basic rate, the cost of living allowance, and the cash value of the concessions, if any.

The cost of living allowance and the cash value of concessions in respect of the supplies of essential commodities at concessional rates shall be computed by the competent authority at such intervals as directed by the appropriate government.

Regards,
BS Kalsi

Thanks, Mr. Kalsi. Could you please guide me on the things to consider regarding the following Salary Components under "Wage"?

Basic, HRA, Special Allowance, Travel Allowance, Duty Meal Component, Hill Station Allowance, Medical Allowance, and City Allowances. All of them are paid on a monthly basis.

The issue of splitting of minimum wages has been decided by the Supreme Court in the case detailed below. The law doesn't provide against the splitting of minimum wages.

URL: [https://indiankanoon.org/doc/1146344/](https://indiankanoon.org/doc/1146344/)

The difficulty lies in the definition of wages under the MW Act, which does not define the constituents of wages as basic and DA.