Understanding Consolidated Salary: Do We Need to Specify Special Allowance for Temp Workers?

Dear All,

We have recruited ITI Temp workmen. We have offered them a consolidated salary of Rs. 4000. However, we have not provided a breakdown of the Rs. 4000, such as Basic and Special Allowance. The Special Allowance increases every six months, which may result in a salary increase. Nonetheless, we intend to offer Rs. 4000 only, which exceeds the minimum wage. I would like to inquire about the current rate of the Special Allowance, which stands at Rs. 686 per month, though we have not specified it in their salary. Is it necessary to specify the Special Allowance as per government rules? Also, what is the legal value of the "consolidated salary" in labor law?

Kindly provide a reply.

Sachin Dethe

Hi,

You don't have to state the salary breakup in the appointment letter of a temporary employee. It is true that if you are paying more than the minimum wages, the 'Inspector' will not trouble you. However, you need a proper salary breakup in the muster cum wage register for the purpose of calculating E.S.I. and P.F. contributions. Otherwise, you will unnecessarily pay extra E.S.I. and P.F. contributions on the entire amount of salary, which may include allowances.

S.M. Paranjape, Advocate, Pune
9850083760