How Should We Adjust Our Wage Structure After the Recent Minimum Wage Increase?

Dear All,

We are providing minimum wages as per the rules of 2016-2017. Just this month, we have given the Performance Appraisal (PA) to all employees. Currently, the minimum wage in my company is 8500 + OT for men, 6500 + OT for women, and other allowances.

Recently, the government has raised the minimum wage from 6500 to 10000. This change poses a challenge for us in managing our current wage structure.

We would appreciate your insights and suggestions on how we can address this issue effectively.

Thank you,

Nagarjun R HR Admin Papas Trading Private Limited

Dear Mr. Nagarjun,

You have stated that you are giving minimum wages as per the notification for the year 2016-17. Please clarify your statement as we have provided "PA to every employee."

Please do not consider "OT" for the purpose of payment of minimum wages. Overtime (OT) is paid for work beyond stipulated hours or extra working. Why is there a difference of Rs 2,000/- between male and female employees, which may be in violation of the Equal Remuneration Act, 1976? Kindly follow the minimum wages notification applicable to your industry for the year 2017-18.

Thank you.

Dear Mr. Srinath Sai Ram,

We can give a maximum of 15% for a salary increment. However, the government has increased the minimum wages from 6800 to 10100. How can we give more than a 40% salary hike? We have around 250 employees, and if we have to give an increment to every employee, the total salary paid will be high, making it very difficult.

Thank you.

Dear Members,

I am awaiting your valuable contribution to the following post regarding the applicability of the Minimum Wages Act (Central) for the Oil & Gas industries.

Applicability of Minimum Wages Act for Oil & Gas Industries

Oil & Gas industries are not classified under Scheduled Employment in relation to The Minimum Wages Act, 1948 (Central) and are governed under Central Rules.

My question is: the Service Agency (Contractor) carrying out Operations & Maintenance jobs (Pipelines Maintenance) will fall under which category of industry for payment of Minimum Wage?

Industries Classified as Scheduled Employment

The following industries are classified as Scheduled Employment under The Payment of Minimum Wages Act, 1948 (Central):

1. Agriculture
2. Mines
3. Construction/Maintenance of Roads, Building Operations & Runways
4. Employment in laying of underground electric, wireless, radio, television, telephone, telegraph and overseas communication, cables, and similar other underground cabling, electric lines, water supply lines, and sewerage pipelines
5. Loading & unloading in Goodsheds, Parcel offices of Railways, other Goodsheds, Godowns, warehouses, and Docks & Ports
6. Housekeeping (Sweeping & Cleaning)
7. Watch & Ward (Security)

The agency is not involved in Construction/Maintenance of Roads and Building Operations & Runways on the client's premises but is responsible for maintenance of their Stations & Pipelines in multiple states.

The client is insisting on paying the Minimum Wages as per the "Construction/Maintenance of Roads and Building Operations & Runways." Is this correct?

To my knowledge, there is a provision under the Minimum Wages for the classification of industries known as Residuary Factories or Registered Factories, which are not covered under any Classified Scheduled Employment. The Minimum Wages defined under this industry are payable to workmen.

I kindly request you to look into this and advise accordingly.

Thanks and Best Regards,

Suresh

Dear Mr. Nagarjuna,

The government declares minimum wages based on the cost of living index. The minimum wage indicates that it is the minimum amount required for survival. Not giving the minimum wage will attract penal provisions and amounts to exploitation. The issue is not about the percentage. The very fact that you have different wages for men and women employees shows that you have violated the Equal Remuneration Act of 1976. If you want to be law-abiding, then you have to comply with the statutory provisions, and in this case, it is providing minimum wages. If not, you will face prosecution and attract penal provisions. That will prove very costly for your company.

Dear Mr. Nagarjun,

You have conveniently chosen not to reply to my question, "We have given 'PA' to every employee." Why is there a difference of Rs 2,000/- between male and female employees in violation of the Equal Remuneration Act, 1976?

Why is overtime payment included for the purpose of calculating minimum wages? As per the notifications attached by you, minimum wages are applicable from 01/04/2016 to 31/03/2017. Please follow the minimum wages applicable from 01/04/2017 to 31/03/2018.

Dear Mr. SRINATH SAI RAM,

If I want to match the current minimum wages, the company will incur a loss. This is because we would have to pay an extra 5 to 6 lakhs every month. How can I avoid this loss?

We are not a highly profitable company; our industry is the Co-Packing Industry, where we only have a margin of 2-3%.

We have conducted meetings, and if we increase wages for female employees, we will also have to raise wages for male employees. This situation poses a significant challenge for us. Currently, we are still uncertain about the actions we will take.

Thank you.

Dear Mr. SURESH2511,

The oil and gas industry is a separate sector, and minimum wages are applicable to this industry as well. I recommend checking with competitor companies or other oil and gas industry sources for more information.

We currently do not have knowledge about the oil and gas industry.

Thank you,
Nagarjun R
HR Admin
Papas Trading Private Limited