Hai
Much was discussed on this subject. The actual point for discussion is whether the minimum wages paid to an employee can be bifurcated into various components like Basic, DA, HRA, Conveyance Allowance, Washing Allowance, Special Allowance etc and by including all these allowance it should not be less than the minimum wages prescribed by the Government to a particular class of establishments/category of employees.
As per Section 2 sub-section (h) Payment of Minimum Wages Act, 1948, the wages is defined as "all remuneration, capable of being expressed in terms of money, which would, if the terms of the contract of employment, express or implied, were fulfilled be payable to a person in respect of his employment or of work done in such establishment and includes house rent allowance but does not exclude certain type of allowances as mentioned in clauses (i) to (v) under the afore said section.
By persuing the language used in the above definition the minimum wage constitutes all the allowances which are capable of being expressed in terms of money. Hence there is no harm in bifurcating the minimum wage component in to various nomenclature of allowances but it should be keep in mind that all these allowances put to gether should not be less than the minimum wages prescribed by the Government to the particular class of establishment/factory.
However, as per Section 6 of the P F Act says the contributions as per the rates fixed by the Government shall be payable on "basic wages, dearness Allowance and retaining allowance if any and Sec 2(b) defines what is basic wage. According to which basic wage means all emoluments which are earned by an employee while on duty in accordance with its terms of employment but does not include HRA/Commission/any other similar wages. For example in out pay structure if HRa/Special Allowance /Commission is included it will satisfy the requirement of Minimum Wages Act and also not liable to pay contributions on those allowance under the PF Act. From the above it is clear we can bifurcate the minimum wages as per the standing orders of the Company and pay the PF contributions only on those allowances as defined under the PF Act.
Thanks
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