Different Salary Structures in One Company: How Do Legal Requirements Differ for Offices and Factories?

Different salary structures in the same company

Different salary structures or salary components are possible within the same company. Please reply in accordance with legal requirements for both offices and factories.

I think that the actual answer intended to be sought by the poster cannot be culled out from the question.

Differences in Salary Structures

When there is a difference in the grades, cadre, and nature of job positions of employees in the same organization, differences are bound to arise in the salary structure as well as the components pertaining to the specific nature of duties performed.

However, there cannot be different scales of salary for the same class of employees when they are employed in the same or similar nature of works.

The answer to your question is yes. There is no law that can stop any organization from doing so. However, to frame a remuneration structure in West Bengal, you have to consider HRA as per the State House Rent Allowance Act, a minimum of 5% of Basic & DA.

For any remuneration structure being implemented today, it is essential to check Minimum Wages, PF Gross as per the Supreme Court guidelines, which in the future will be Basic and DA as per the definition of Wage under the Wage Code, etc., for both office and factories. Other factors to bear in mind for higher-level employees include the impact of ITAX and administrative hassles in processing payroll, etc.

Thanks & Regards,

S K Bandyopadhyay (Howrah, WB)

Salary Structure Considerations

Salary structure can differ according to the categories of employment, nature of assignments, position in the organization, and so on. What matters is that the salary structure should include compliances and mandatory heads as applicable and governed by government authorities or state notifications. Also, it is important to consider income tax applicability to ensure the right structure formation.

Dear colleague,

If you are referring to different salary "structures" to mean various components of the salary, then depending on the categories of employees—workers, supervisory, managerial, and top-level management—the structure, quantum, and components will differ within the same organization.

Factors Determining Salary Structure

In matters of salary structure, it is determined by taking into account the following:

* Minimum wages if applicable,
* Market demands and forces for certain skill levels,
* Existence of a strong union and collective bargaining history,
* Milestone judgments of apex courts in matters of employment conditions in general and wage determination in particular,
* Category and level of employees—Here, employees doing the same or similar skill level of jobs are clubbed together to develop a salary structure by following the principle of equity and fairness. While components of salary will remain uniform as per the grouped categories, the salary differential between two categories or two individuals in the same category will differ with performance, education, experience, level in the hierarchy, range of responsibilities, and seniority.

Such differences in salary structure do exist and are justifiable in any organization. However, it will be unjust if employees are given individual-specific salary components if their skill level is the same. For instance, in an unskilled category, if one worker gets basic and DA and the other one gets only basic, that kind of difference can create havoc.

Hope your query is properly understood and answered.

Regards,
Vinayak Nagarkar
HR and Employee Relations Consultant