Navigating Industry Classification and Minimum Wage for Wind and Solar Services in India: Any Insights?

Hello HR Professionals,

I need some guidance regarding the industry classification and minimum wage determination for our company. Our primary business involves providing services in major component replacement for wind turbines and acting as an EPC (Engineering, Procurement, and Construction) contractor for solar power plants.

Industry Classification

Under which industry category does our business fall? Is it classified under renewable energy, construction, or another category?

Minimum Wage Determination

How do we determine the minimum wage for our industry, considering that our head office is in Tamil Nadu but we operate across various states in India?

Any insights or references to relevant laws and guidelines would be greatly appreciated.

Thank you!

Minimum wages and location-based employment

Minimum wages should be paid according to the location where the employee is employed, and for that, it is the state minimum wages that have to be followed. Therefore, the wages of your employees deployed in different states will vary. It is obvious that depending upon the cost of living in the locality, the wages should also change.

Industry classification and applicable minimum wages

The applicable minimum wages will depend upon the schedule under which the industry is categorized, and this will also differ in different states. I don't think there is any schedule called renewable energy. Since you are involved in the installation of electrical panels, solar panels, etc., you have to check and see which function best suits your kind of operations. If you do not find any activity connected with your area of operations, you can follow the notification issued for either the Engineering industries or the Construction industry. Under the engineering industry, you can find minimum wages applicable to fitters, welders, electricians, etc., and accordingly, fix the wages of employees.

Dear Vignesh,

In most cases, I think your work falls under Engineering, but please read the relevant notification of the state government for minimum wages. Please note that if two industries apply, the Labour Commissioner generally tends to take the higher one.

If a person is permanently deployed in a particular state, then use the minimum wages of that state. Remember to pay PT, LWF, etc., also in that state.

However, if you have people traveling to various places, then use the base location of the employee. You may initiate a process of paying an additional amount for working on a per-day basis in states with higher minimum wages or cost of living index.

Dear Vignesh,

As per your posting, EPC work falls under the construction category. In view of the above, you need to pay the notified rate of wages of the state where the project is likely to start. Furthermore, the central rate of wages will be applicable to Central Government, PSUs, and Union territories.