How Can I Prove to My Client That Employer's Contributions Aren't Part of Minimum Wages?

Dear Seniors,

As we are aware, the Minimum Wage (MW) has to be paid according to the notification, and employer's contributions to PF, ESI, Bonus, leaves, etc., should be paid over and above the Minimum Wages.

We have submitted an escalation bill (due to a change in Minimum Wages) to one of our clients. However, the client is denying to pay the escalation. They are insisting that since PF, ESI, Bonus, etc., are all part of the Minimum Wages, which have already been paid extra by the client. Therefore, they have refused our bill and are asking for any notification or court verdict that clarifies/proves that the employer's share of PF, ESI, Bonus, etc., are not part of the Minimum Wages. These components should be paid extra beyond the Minimum Wages.

I deal with manpower costing (MW Revision, PF, ESI, Bonus, Leaves Rules, OT costing, etc.) and related supporting documents. Hence, my HOD has instructed me to provide any documents through which we can convince our client.

I am stuck in a very critical situation and need your support to prove my point. I have searched here and on Google as well, but have not found any supporting documents.

**Location**: Delhi, India

In the context of Indian labor laws, the employer's statutory costs such as PF, ESI, Bonus, etc. are separate from and should be paid over and above the Minimum Wages. Here are the steps you can take to provide evidence to your client:

1. Reference to Relevant Laws: The Payment of Wages Act, 1936, and the Minimum Wages Act, 1948, govern the payment of wages and minimum wage rates in India. These laws clearly outline that employer contributions like PF, ESI, Bonus, etc. are not to be considered as part of the Minimum Wages.

2. Court Verdicts: While there may not be a specific notification addressing this issue, you can refer to relevant court verdicts that support the separation of employer contributions from Minimum Wages. Consult legal databases or seek guidance from legal experts to find case law that upholds this distinction.

3. Documentation: Compile all relevant documents such as pay slips, wage registers, and communication with the client that clearly show the breakdown of wages and statutory contributions. Highlight how these components are distinct and should be paid in addition to the Minimum Wages.

4. Engage Legal Support: If necessary, consider involving legal counsel to draft a formal response to the client citing the legal provisions and any relevant court judgments that establish the employer's share of statutory costs as separate from the Minimum Wages.

By presenting a comprehensive case supported by legal provisions and documentation, you can effectively demonstrate to your client that the employer's contributions like PF, ESI, Bonus, etc. are not included in the Minimum Wages and should be paid over and above the mandated wage rates.