How Should Casual Pay Be Calculated During Contract Breaks? Seeking Legal Insights

Dear all, I would like to seek your advice regarding the following matter.

Contractual Employment and Casual Pay

My company has employees on a contract basis. Staff members work on a six-month contract basis. If a contract is terminated, they will renew it after a 14-day break. However, they are sometimes asked to work for seven days within that 14-day break due to high occupancy. For those extra seven days, the company pays casual daily payments of Rs. 500.

Inquiry on Casual Pay Calculation

I am seeking information on whether there are any laws or procedures for calculating this casual pay. Should it be less than the daily wages, or can it be increased beyond that?

I appreciate your guidance on this matter.

Thank you.

What is the nature of the job?

There is a minimum wage enactment in every state that lays down rates of pay for daily work. Companies have to pay the minimum wage as laid down by law. Beyond that, it is at the company's discretion for those 7 days.

It is a hotel. They are paying more than the minimum salary. Only casual pay is low.

Are you receiving more than or equal to minimum wages on a daily basis? If so, then there is not much that can be done.

It is lower than daily wages. Is there any calculation for casual wages?

Dear Kodeshi,

Once the Minimum Wages are fixed under the Minimum Wages Act, 1948 by the Appropriate Government for any employment in an industry, the status of that employment, such as permanent, temporary, contractual, or casual, does not matter. The employer has the option in respect of the mode of payment only if it is different from the mode of payment based on which the statutory rate is fixed. In other words, if the minimum wages are at a monthly rate, you have to divide it by 26 to arrive at the daily rate, and if it is at a daily rate, you have to multiply it by 30 to arrive at the monthly rate.

It is discernible from your post that the monthly wages are more than the minimum wages, but the casual wages are less than the monthly wages on a pro-rata basis. What is important in such a situation is that the casual wages should not be less than the minimum wages.