Minimum Wage Dilemma: How Should Experience Affect Pay Compared to New Hires?

What is the method to fix minimum wages for an employee with more years of service compared to a fresher? Please clarify.

In Maharashtra, the minimum wages are not linked with years of service. They are the same for all individuals falling under a particular skill type.

Col Anand,

Can you specify what you mean by fixing minimum wages, as minimum wages are set by the state and central government? I presume you are well aware of this fact.

In companies where there is a defined wage structure with grades linked to the skill of the employee and the skill and experience required to handle a particular job, it is simple.

In Maharashtra, the minimum wages are not linked to years of service. They are the same for all individuals falling under a particular skill type. However, you have the liberty to adjust the minimum wages for employees with longer lengths of service.

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In Maharashtra, minimum wages are reviewed periodically by the Committee constituted under the Minimum Wages Act (every 5 years) for the specified scheduled employments in the Act. The minimum wages, once finally fixed, relevant to skill level, are applicable for starting wages and do not reflect experience level. You are free to set wages for experienced workers higher than the minimum based on industry practice and bargaining.

Regards,

V.L. Nagarkar
HR Consultant