National and Festival Holiday Pay: Should We Pay from Basic or Gross Salary?

Dear Professionals,

I need clarification on National & Festival Holiday pay.

NH/FH - Leave Given

NH/FH - Factory Run (Form V-A Submitted)

In both categories, is basic pay alone enough, or should we pay from the gross?

Kindly advise.

Vejaykumar Ramasamy

Wages Deduction for Absence Without Leave

What are the wages deducted when an employee is absent without leave on any day? The same should apply to wages payable for holidays.

Please read section 5 of the TN Industrial Estates (National & Festival Holidays') Act, 1958 attached, where the relevant information is provided.

Wages

(1) Notwithstanding any contract to the contrary, every employee shall be paid wages for each of the holidays allowed to him under [section 3 or 3A]. (a) twice the wages; or (b) wages for such day and to avail himself of a substituted holiday with wages on any other day.

What is the Factory Wages Act 1948?

The Factories Act, 1948, mandates the payment of minimum wages to the workers by prescribing a fixed pay rate. An employer shall pay their employees at least the prescribed minimum wage rate. If an employee is paid less than the minimum wage, the employer should pay that employee at least what the law requires.

Dear sir, Thank you for your valuable information. My query is if an employee's per day wage is 600/- and the per day Basic Wage is 450/-. In that case, if we don't run the factory and give a holiday on any of the NH/FH, do we have to pay 600 or 450, i.e., the basic wage? Kindly advise.

Thanks

Yes, VJ, what I have said is that the wages payable for a holiday should be the same as the wages not paid when a worker remains absent. Obviously, if a worker is employed on a wage of Rs 600 per day and takes leave, you will deduct Rs 600, not just the basic pay, i.e., Rs 450 alone. Therefore, if the wage per day is Rs 600, this should be the wage payable on holidays as well. If you interpret the wages as basic wages and whatever you pay as allowances, then you will have to pay allowances for the days the worker remains on leave, and you can deduct only the basic wages for the days of absence from the monthly total wages payable.

Definition of Wages Under the Tamil Nadu National Festival and Special Holidays Act, 1958

Refer to Section 2(g) of the Tamil Nadu National Festival and Special Holidays Act, 1958, which defines wages as all remuneration capable of being expressed in money. This would, in the terms of employment, be express or implied, fulfilled, i.e., payable to an employee in respect of his employment or of the work done by him in such employment. It includes:

(i) such allowances (including dearness allowance) as the employee is entitled to at the time;

(ii) the value of any house accommodation; or supply of light, water, medical attendance, or other amenities; or any service; or any concessional supply of food grains or other articles;

However, it does not include:

(a) any bonus;

(b) any contribution paid or payable by the employer to any pension fund or provident fund, or for the benefit of the employee under any law for the time being in force;

(c) any gratuity payable on the termination of his service;

(d) any sum paid to the employee to defray special expenses entailed on him by the nature of his employment;

(e) any traveling concession.