How Can We Address Salary Hike Requests for Office Boys Without Straining Our Budget?

Dear all,

We are a travel company where the office boys play a key role. We have 10 office boys. Now, I have faced an issue related to the salary hike of these guys. According to them, their salary has not been revised for more than a year now, and they are not covered under medical or insurance benefits. They do outdoor trips to clients, banks, consulates, etc., and hence have requested at least the medical aid that they would need in times of accidents.

Their demands seem genuine, but I may not be able to get it done at once. Their primary demand is a salary hike. Can anyone suggest to me how we can manage them with minimum money outflow?

Regards,
Jhuma

Hi, by looking at your request, it appears that they are working in your company payroll. Since the numbers are high, the first thing you can do is put them on a third-party vendor contract and mention the raise you would like them to receive based on industry norms. This may help you.

Your post does not say anything about the present salary paid. If it is less than the minimum wages fixed by the Govt (your state government), then you have to first give them minimum wages. Then, if you are covered under the ESI Act, let these Office Boys be under the ESI Scheme which will be cheaper than any other medical insurance. Please narrate the details.

Regards, Madhu.T.K

Dear Madhu,

We pay them in cash, between Rs 2,500 to Rs 4,000. They were paid one month's salary as a bonus. The point is, being a small organization, we may not be able to match the benefits offered by larger corporations. However, we do provide reimbursement for conveyance, and we pay them an additional Rs 150 for night shifts and holidays.

Regards,
Jhuma

Still, your answer is incomplete. To know the actual minimum wages fixed, you have to visit either the website of the State Govt. or meet the concerned person in the Labor Dept. of your locality. First, ensure that you are paying the minimum wages. A wage to an Office Boy @ Rs 4000 is okay, but at the bottom level, I don't feel it is a fair one. To start with, why can't you offer a hike like 20% or make the wages at a level of Rs 3250 (roughly Rs 125 X 26)?

While negotiating, there is no scope for night shift allowance and overtime for holidays. But an allowance once paid cannot be withdrawn also. Therefore, you will have to continue with the practice. You should project your wage bill with an imagination to that end also.

I presume that you have at least 20 employees in your travel agency and if so you have to be covered under the ESI Act, and following that, your office boys will be under the fold of ESI. You have to pay @ 6.5% of the salary paid to those employees drawing not more than Rs 10000/- to the ESI Corporation every month. Of this 6.5%, you can deduct 1.75% from the salary of the respective employee. Employees drawing up to Rs 70 per day shall not pay employees' share of contribution. Once covered, the medical treatment, etc., of the employees will become the responsibility of the Corporation.

When they are covered under the ESI schemes, they will also become covered under the Employees Provident Fund Act. Under the EPF, the employer's responsibility is much higher, and his contribution alone will be 13.61% of the salary.

The above act will be a motivator for the employees.

Regards,