How Do I Update an Employee's Appointment Letter for New Minimum Wage Compliance?

Dear Sir/Madam,

Since the minimum wage has increased, there is one employee working at the Bangalore location in my company who falls under the minimum wage bracket. His earlier appointment letter needs to be revised to align with the current minimum wage. I kindly request your assistance in providing a letter (revision in continuation of the existing appointment letter) to be shared with the employee for the restructuring of the salary package to comply with the updated minimum wage regulations.

Thank you,
Sneha

Minimum wages increase quarterly. We don't give any letter to the employees. We provide salary slips which show their breakup.

Upasana

Ms. Sneha,

The minimum wages are increased from time to time based on the cost of living index and are regulated under the Minimum Wages Act. The appointment letters are not linked with the minimum wages. The increase in wages/salaries is an automatic phenomenon of the continuance of the appointment. It is never revised or issued afresh upon getting an increment or revision in the wages/salaries. The salary slips are issued with a detailed breakup of their earnings.

BS Kalsi,
Member Since August 2011

Dear Ms. Sneha,

As Mr. Kalsi has pointed out, there is no need to provide a letter each time the minimum wages are revised.

However, if the initial appointment letter only mentions the amount of wages without specifying that it is as per the minimum wages, you may want to clarify that the employee is and will be paid the minimum wages.

Even if you choose not to do so, no harm will be done.

Best Wishes,

Col. Rathi

Dear Ms. Sneha,

As clarified by other valuable members, when it comes to Minimum Wages, there is no need to give any letter to the employee to that effect particularly, as it is an ongoing process. However, you may, if need be, issue a common circular indicating the Revised MW and its effective date. This will protect your position.

Please remain always updated on the MW because it is a statutory matter involving the Labour Commissionerate.

Regards,

PL Kanthan

Dear All,

Thank you for such valuable feedback. Actually, the applicant is deputed at the Karnataka location, and the compliance request has arisen from our client location. Thus, I have issued a letter to him mentioning the revision in salary structure along with the backdated arrears. Can this be shared with the client after receiving acceptance from the candidate?

Clarification on Minimum Wages in Appointment Letters

I quote your postings, which are as follows: "However, in case in the initial appointment letter you have mentioned only the amount of wages and not mentioned that it is as per Min Wages, then you may consider clarifying that he is and will be paid min wages."

Let me make it clear that in the appointment letter, there is no mention of minimum wages; rather, it is only wages or salary at which the employee is initially hired. The payment of minimum wages in the scheduled employments is the statutory obligation of the employer. There is no need to mention the same in the appointment letter. It is, of course, true that in NCT of Delhi, the rates of minimum wages are revised twice a year.

Sharing Information with Clients

As you have mentioned in your postings, I find your action quite in order except where you have inquired as to whether the information can be shared with the client after getting acceptance from the candidate. In my opinion, there is no need to seek acceptance from the candidate as payment of revised minimum wages is a statutory obligation. However, there is no harm in informing him of the revision.

Regards,
BS Kalsi

In my organization, it is mentioned that the employee is to be paid minimum wages and is categorized as unskilled, semiskilled, or skilled. The reason is that for all other employees, the salary is revised as per the standing order every year, whereas for these categories, it gets revised twice a year. However, no harm is done if it is not mentioned as minimum wages. This differs from employer to employer.

Also, I would like to mention that if the employee's place of work is different from the headquarters and they have been deputed on a permanent basis to work at, say, Place A, then minimum wages will be applicable for Place A and not as applicable at the headquarters.

Regards,
Col. Rathi

P.S. It is always a pleasure to read your posts.

Just add the following clause in the appointment letter: 'Your wages will be revised as and when the authority revises them from time to time.'

Dear Semanti, your issue pertains to the deputation of an employee to a location other than their appointed place. It is advisable to issue a letter to the employee stating that the increase in wages is to comply with the Karnataka Minimum Wages. If the employee is posted at another location, their wages may be in accordance with the minimum wages applicable to that particular place, even if it results in a decrease. It would be more appropriate to include the difference in minimum wages as a 'deputation allowance applicable only for the particular place' to preempt any future problems.

Kind regards, [Your Name]