One of the officers in A.P. Labour Department has been taking into consideration the payment of contribution of the employees deducted by the management under EPF Act from the ECR statement and preferring claims under Sec. 20 of Minimum Wages Act. Fortunately, the gross is higher than the Minimum rates of wages payable to the workers in the State of A.P. On seeking clarification, the said officer is referring to Sec. 6 of EPF Act and states EPF department activity is confined only to that extent of recovery shown as basic and special allowances shown in the records and if the recovery is in congruence to the sum total shown in the records their action ceases. It is not their duty whether the management is deducting EPF on the A.P. State declared minimum wages.
But, it is asserted by the Labour official that the extent the management has considered for the contribution from the wages of the workers under EPF can be taken by him the extent of Minimum rate of wage the management is paying to each of the workers and he is not required to consider whether the gross wage is more than the Minimum rate of wage as it contained many more components which cannot be considered as the components of Minimum wages, which are considered defray expenses, which do not help keeping the sustenance and maintenance of the worker and his family and preserving his efficiency as a worker.
In his calculation of Minimum wages he considers the components illustrated under Sec. 4 of the Minimum wages Act but not Sec. 2(h) of the said Act. He also provides clarification on the difference between the two provisions of the said Act. When I approached some of the other officers of the same department, they are considering the whole gross wage and not preferring Claim if the gross is found more than the Minimum wages. When I referred the land mark judgment provided by the officers of the same department i.e. Air Freight Courier Vs. Govt. of Karnataka of 1991 he interpreted that this judgment is not to consider the whole wage as Minimum rate of wage so that the whole wage if found grater than the Minimum rate of wage of the State to exempt the management from preferring Claim under Sec. 20 of the Act.
The judgment emphasizes that the components of Minimum wages shall not be considered separate as Basic and VDA but one pay package and they are not amenable to split up and if the sum total of the two is found more than the minimum rates of wages no claim is required to be preferred. He, further, stated that in the same judgment the Supreme court also stated that the components which cannot be considered for computing Wage under Sec. 2(h) should also not to be considered for calculation of Minimum wages. The reason he explained to consider the component of recovery of EPF of employees that Sec. 6 of EPF Act speaks about the components of Basic, DA, Retaining allowance and Cash value of food concession.
Since the later two are not applicable to my establishment I was demanded to cover at least the entire Basic and DA revised by the Govt. of AP under EPF Act, which are the primary components of Sec.4 of Minimum wages Act but not the whole Gross wage. According to him the component covered under EPF enactment is less than the Minimum rate of wage i.e. Basic and DA revised by the Govt. of AP though the gross is more than that, which included the components stated to be excluded under Sec. 2(h) of the Act. What should I do? Shall I face the proceedings instituted by the Labour department for non-payment of Minimum rates of wages even though I pay more than the Minimum rates of wages in terms of Gross?
But, it is asserted by the Labour official that the extent the management has considered for the contribution from the wages of the workers under EPF can be taken by him the extent of Minimum rate of wage the management is paying to each of the workers and he is not required to consider whether the gross wage is more than the Minimum rate of wage as it contained many more components which cannot be considered as the components of Minimum wages, which are considered defray expenses, which do not help keeping the sustenance and maintenance of the worker and his family and preserving his efficiency as a worker.
In his calculation of Minimum wages he considers the components illustrated under Sec. 4 of the Minimum wages Act but not Sec. 2(h) of the said Act. He also provides clarification on the difference between the two provisions of the said Act. When I approached some of the other officers of the same department, they are considering the whole gross wage and not preferring Claim if the gross is found more than the Minimum wages. When I referred the land mark judgment provided by the officers of the same department i.e. Air Freight Courier Vs. Govt. of Karnataka of 1991 he interpreted that this judgment is not to consider the whole wage as Minimum rate of wage so that the whole wage if found grater than the Minimum rate of wage of the State to exempt the management from preferring Claim under Sec. 20 of the Act.
The judgment emphasizes that the components of Minimum wages shall not be considered separate as Basic and VDA but one pay package and they are not amenable to split up and if the sum total of the two is found more than the minimum rates of wages no claim is required to be preferred. He, further, stated that in the same judgment the Supreme court also stated that the components which cannot be considered for computing Wage under Sec. 2(h) should also not to be considered for calculation of Minimum wages. The reason he explained to consider the component of recovery of EPF of employees that Sec. 6 of EPF Act speaks about the components of Basic, DA, Retaining allowance and Cash value of food concession.
Since the later two are not applicable to my establishment I was demanded to cover at least the entire Basic and DA revised by the Govt. of AP under EPF Act, which are the primary components of Sec.4 of Minimum wages Act but not the whole Gross wage. According to him the component covered under EPF enactment is less than the Minimum rate of wage i.e. Basic and DA revised by the Govt. of AP though the gross is more than that, which included the components stated to be excluded under Sec. 2(h) of the Act. What should I do? Shall I face the proceedings instituted by the Labour department for non-payment of Minimum rates of wages even though I pay more than the Minimum rates of wages in terms of Gross?