Minimum Wage Calculation: Can Bonuses and EPF Contributions Be Included?

V.K.Joshi
For the calculation of minimum wages, can the payment of bonus, gratuity, and the employer's part of EPF also be taken into consideration?
Madhu.T.K
No. In order to establish that the employer is paying the notified minimum wages, only the fixed gross wages can be considered. The bonus, which is an annual payment, the employer's contribution to EPF or ESI (which is a statutory responsibility of the employer), and gratuity (which is again a responsibility of the employer, with the payment happening only when the employee leaves after a minimum service of five years) cannot be put together as part of wages. Even incentives, the payment of which is dependent on the occurrence of certain events or meeting targets, will be outside the scope of wages for deciding compliance with minimum wages.
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