Confused About Wage Differences in Tamil Nadu? Which Rate Should Hotels Follow?

The basic wage payable to employees of hotels and restaurants as per the Tamil Nadu Labour Department is about Rs. 6075 per month. However, as per the central government's list on minimum wages for 2016-17 for Tamil Nadu, it is about Rs. 2570 per month (Rs. 98.85 per day). The significant difference in these figures raises the question of which one should be followed. Can you please provide guidance on this matter? Thank you.

Please note that the fixation of minimum wages for different scheduled employments is a matter for the concerned state, and various mechanisms are being utilized by states to adjust the minimum wages over time, such as linking them to price indexes or revising them based on political decisions.

In light of the above, I disagree with your statement regarding the minimum wages for Tamil Nadu as per the central government's list for 2016-17, which indicates it to be approximately Rs. 2570 per month (Rs. 98.85 per day).

P K Sharma

Understanding Minimum Wage Discrepancies in India

The Constitution of India has provided equal powers to the Union (Central Government) and State Government on the items mentioned in the Concurrent List (Labour and Employment is one in the list). India is a vast country, and every state is different from others in many aspects. As such, minimum wages vary from state to state, declared by considering the Consumer Price Index/Cost of Living Index of the particular state. For Central Government undertakings, minimum wages are fixed by the Central Labour Department. Similarly, for State Government undertakings, the State Labour Department sets the minimum wages. This is why wages differ among states.

However, the higher of the central or state wage must be paid to the workmen, regardless of the competent authority's jurisdiction (Central or State). For example, if two factories (of the same schedule of employment) are located in the same state, one under the Central Government and another under State Government jurisdiction, the State Government notified wages must be paid in both factories if the Central Government minimum wages are lower.

Hope this clears any ambiguity.

Regards, Raghavendra

There is some mistake in your interpretation. The central minimum wage list is for the country as a whole, and not for each state. So you need to have another look at the documents and see what exactly you are referring to. I think you are looking at the base wages, whereas what you need to see is the base plus special allowance. Both together should be at similar levels as they are base due to the cost of living.

Clarification on the Current State Wages Act

I work for an MNC in Bangalore and need clarification on the Current State Wages Act. Recently, my organization changed the salary component structure, stating it's as per the recent State Wages Act.

Before Changes:

Basic Pay -> 6500,
HRA -> 2500,
Special Allowance + Medical Allowance + Education Allowance + Fixed Incentive = 21,000.
(Monthly Take Home 30,000)

After Changes:

Basic Salary -> 6500,
HRA -> 18800,
Medical Allowance -> 1800,
Educational Allowance -> 1400,
Incentive -> 1500.

Is this a State-compliant salary structure?