Is Your Payroll Meeting the New State Minimum Wage for Unskilled Workers? Let's Discuss!

My query is whether the minimum revised wage rate duly announced by the state government is also applicable to employees who are on the payroll of an organization. For example, as per the payroll structure, suppose an employee is engaged in a certain grade equivalent to unskilled labor and is receiving Rs. 13,008/- including P.F. contribution from the employer. However, the state government has announced Rs. 450/- per day wage for unskilled labor. Then, is it necessary to revise the salary of the employee to Rs. 450 * 30 (average days per month in a calendar year) = Rs. 13,500/-?

Please provide clarity.

Thank you.

Understanding Minimum Wages

The minimum wages notified by the government are the baseline wages below which no employer should pay workers in a particular category. These should be gross wages excluding the employer's contributions to ESI, EPF, and other contributions payable by the employer. For instance, if the daily wage rate is fixed at Rs 450 per day, this amount should be multiplied by the number of days the employee is employed. If they are employed for 26 days, the calculation would be 450 x 26, amounting to Rs 11,700, and not 450 x 30, which would be Rs 13,500.

Paying Above Minimum Wages

If you are paying more than the minimum wages notified by the government, you should continue to pay the higher amount and cannot reduce it to the notified wages.

Compliance Check

For compliance, please verify if the daily wages, calculated by dividing the monthly wages (excluding ESI and PF of the employer) by 26, are equal to or more than Rs 450.