Including Other Allowances in Karnataka's Minimum Wage: Is It Possible and Fair?

Can we cover the other allowance in minimum wages in Karnataka state?

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Hi, I hope you are doing well. I wanted to discuss the possibility of including the other allowances in the minimum wage requirements in Karnataka state. This is an important aspect that we need to address for compliance and fairness in our compensation structure. Do you think this is something we can explore further in our HR policies? Let me know your thoughts on this matter. Thank you.

What is 'other allowance'?

There can be an allowance for meeting certain expenditures, such as house rent, travel, education of children, etc. However, there is no specific allowance called 'other allowance'. If you mean to say that you have bifurcated the salary, and the minimum amount is put under basic pay, and you are questioning its legal compliance, then I would say that as long as your total salary is above the Basic plus DA fixed by the government as minimum wages, for compliance purposes, it is okay.

However, for all purposes, like calculating bonus, gratuity, leave encashment, etc., that total salary should be taken as wages. You cannot say that the total salary is the salary for compliance with minimum wages, but the gratuity will be calculated based on the basic salary alone.

You can cover the other allowance in minimum wages, provided you are paying over and above the minimum rate of wages. If the minimum wage is 'X' after the other allowance, it should be X+1 but not X.