Minimum Wages Act: Is It Violated When Permanent Employees Earn Less Than Contractors?

If the basic wages of a permanent employee are lower than those of a contract laborer, would it violate the Minimum Wages Act?

It will be a violation of the Minimum Wages Act not because the worker of the contractor is getting more than the wages of an on-roll worker, but because an employer is not expected to pay any wages that are less than the notified minimum wages.

Legally, there is no problem if the gross wages paid to both individuals are not less than the minimum wage fixed by the government for the jobs. However, you may encounter an HR problem.

Equity theory in HR

The equity theory will apply to the permanent employee.

Regards, Varghese Mathew, HR/Labour Law Advisor in Tvm