Understanding Minimum Wages Act 1948: Does Adding 5% HRA Affect Employee Coverage?

If HRA at 5% of basic wages is paid over and above the Minimum Wages, will the employees be covered under the Minimum Wages Act, 1948? Please clarify.

Your question lacks clarity. Are you paying 5% over and above the statutory minimum wages? If so, then what is the issue? You are paying the minimum wages and something extra. If your query is whether paying wages like basic pay and HRA at 5% of basic pay complies with minimum wages regulations, I would say that if the sum of the basic wage and HRA equals the Basic and Variable Dearness Allowance as per the minimum wages notification, then you are compliant with the Minimum Wages Act.

Thank you for the clarification. The clarification I sought was if the Principal Employer/Contractors pay the applicable minimum wages and, over and above the minimum wages, the Principal Employer/Contractor also pays HRA at 5% of Basic + VDA (under the Maharashtra Workmen's Minimum House Rent Allowance Act, 1983). Will the employees not be covered under the Minimum Wages Act, 1948?

When you are already paying the applicable minimum wages and the HRA is over and above the minimum wages, the question of non-compliance with the Minimum Wages Act will not arise. So, what is the issue?

All the workmen who are working in the scheduled industries need to follow the wages not lesser than the Minimum Wages Act. If paying wages (Basic & DA) over and above minimum wages, then there is no non-compliance. In Maharashtra, if engaging more than 50 workmen, you need to pay HRA of at least 5% on the wages. If paying more than the prescribed HRA, then it is welcome.