Kindly let me know the legal and statutory position regarding the following points:
1. What is the minimum basic and DA to be fixed for a gross salary of Rs. 7500/-, Rs. 6000/-, Rs. 5000/-, Rs. 4500/-, and Rs. 3500/-?
2. Can the bonus, gratuity, and leave allowances be apportioned as part of the salary and shown in the payslip?
3. What allowances are exempted from the gross salary for calculating ESI?
From India, Madras
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1. What is the minimum basic and DA to be fixed for a gross salary of Rs. 7500/-, Rs. 6000/-, Rs. 5000/-, Rs. 4500/-, and Rs. 3500/-?
2. Can the bonus, gratuity, and leave allowances be apportioned as part of the salary and shown in the payslip?
3. What allowances are exempted from the gross salary for calculating ESI?
From India, Madras
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Hi,
The minimum Basic & Dearness Allowance to be paid to employees is contemplated in the Minimum Wages Act, 1948. Hence, the Basic & DA should not be less than the one fixed by the Government. Please review the recent notification on Minimum Wages and decide. A soft copy is enclosed for your ready reference.
Bonus & Gratuity should not be displayed on the payslips. Bonus payable to employees varies based on the company's performance and bonus earnings. Similarly, gratuity eligibility is granted only after completing 5 years of service. Employees will only be paid for days when they avail of leave with salary/eligible leave. Therefore, Bonus, Gratuity, and Leave allowance need not be shown on the payslip.
The allowances that are exempted from Gross Salary for calculating ESI are mentioned in Section 2 (22) of the ESI Act. The extract is provided below:
2 (22) "wages" means all remuneration paid or payable in cash to an employee, if the terms of the contract of employment, express or implied, were fulfilled. This includes any payment to an employee in respect of any period of authorized leave, lock-out, or strike which is not illegal or lay-off, and other additional remuneration, if any paid at intervals not exceeding two months, but does not include:
(a) any contribution paid by the employer to any pension fund or provident fund, or under this Act;
(b) any traveling allowance or the value of any traveling concession;
(c) any sum paid to the person employed to defray special expenses entailed by the nature of his employment; or
(d) any gratuity payable on discharge.
Please reach out if any clarifications are needed.
Thanks & Regards,
Kalyan R
Manager - Personnel
Sundaram-Clayton Ltd
Brakes Division, Chennai
919840942232
From India, Madras
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13The minimum Basic & Dearness Allowance to be paid to employees is contemplated in the Minimum Wages Act, 1948. Hence, the Basic & DA should not be less than the one fixed by the Government. Please review the recent notification on Minimum Wages and decide. A soft copy is enclosed for your ready reference.
Bonus & Gratuity should not be displayed on the payslips. Bonus payable to employees varies based on the company's performance and bonus earnings. Similarly, gratuity eligibility is granted only after completing 5 years of service. Employees will only be paid for days when they avail of leave with salary/eligible leave. Therefore, Bonus, Gratuity, and Leave allowance need not be shown on the payslip.
The allowances that are exempted from Gross Salary for calculating ESI are mentioned in Section 2 (22) of the ESI Act. The extract is provided below:
2 (22) "wages" means all remuneration paid or payable in cash to an employee, if the terms of the contract of employment, express or implied, were fulfilled. This includes any payment to an employee in respect of any period of authorized leave, lock-out, or strike which is not illegal or lay-off, and other additional remuneration, if any paid at intervals not exceeding two months, but does not include:
(a) any contribution paid by the employer to any pension fund or provident fund, or under this Act;
(b) any traveling allowance or the value of any traveling concession;
(c) any sum paid to the person employed to defray special expenses entailed by the nature of his employment; or
(d) any gratuity payable on discharge.
Please reach out if any clarifications are needed.
Thanks & Regards,
Kalyan R
Manager - Personnel
Sundaram-Clayton Ltd
Brakes Division, Chennai
919840942232
From India, Madras
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Mr. Kalyan, your post is very informative. However, I am attaching a page scanned from the Minimum Wage Act of 1948. As per this, the Minimum Wage payable can include allowances such as HRA, based on the definition of Wage provided. Please guide.
Harmohan
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Harmohan
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Dear Sir,
Now you may fix basic and DA less than minimum wages as the same was decided in the 7A case of M/s group 4 security. This is for your kind information that HRA is also a part of minimum wages.
If you want a copy of the judgment, you may email me at [email protected].
Sanjeev Kwatra
From India, Delhi
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Now you may fix basic and DA less than minimum wages as the same was decided in the 7A case of M/s group 4 security. This is for your kind information that HRA is also a part of minimum wages.
If you want a copy of the judgment, you may email me at [email protected].
Sanjeev Kwatra
From India, Delhi
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