Dear All,
The case is - my company is an auto component manufacturer in Pune. We have some contractual workers in the company, out of which a few are sincere and hardworking. However, our management is not willing to hire them as permanent employees. In this scenario, to retain such workers, can we offer wages higher than the minimum wages, for example, if as per the Minimum Wage Act it is set at Rs. 5000 per month, can we offer Rs. 7000 or more to the contractual workers?
If yes, what would be the maximum limit of wages?
Please provide a solution or your views.
Thanks,
Ganesh Kadam
8975915050
From India, Pune
Acknowledge(0)
Amend(0)
13The case is - my company is an auto component manufacturer in Pune. We have some contractual workers in the company, out of which a few are sincere and hardworking. However, our management is not willing to hire them as permanent employees. In this scenario, to retain such workers, can we offer wages higher than the minimum wages, for example, if as per the Minimum Wage Act it is set at Rs. 5000 per month, can we offer Rs. 7000 or more to the contractual workers?
If yes, what would be the maximum limit of wages?
Please provide a solution or your views.
Thanks,
Ganesh Kadam
8975915050
From India, Pune
Acknowledge(0)Amend(0)
Dear Member,
Of course, you can pay more than minimum wages, but do take this path very cautiously as you may get caught in the provisions of the Equal Remuneration Act, which clearly states equal pay for equal work. It is very difficult to prove hard work and sincerity. Secondly, by giving different salaries, you would be creating grounds for unionization by spreading discontent among the workers. Also, look at the long term; with the increase in minimum wages, the overall liability of the company will also increase.
It's better to ask the contractor to provide them with an award or something, such as a cash award of Rs. 10,000, by which you can appreciate their contribution without creating any precedence and keeping the company costs in check.
Regards,
Preetam Deshpande
From India, Mumbai
Acknowledge(0)Amend(0)
Of course, you can pay more than minimum wages, but do take this path very cautiously as you may get caught in the provisions of the Equal Remuneration Act, which clearly states equal pay for equal work. It is very difficult to prove hard work and sincerity. Secondly, by giving different salaries, you would be creating grounds for unionization by spreading discontent among the workers. Also, look at the long term; with the increase in minimum wages, the overall liability of the company will also increase.
It's better to ask the contractor to provide them with an award or something, such as a cash award of Rs. 10,000, by which you can appreciate their contribution without creating any precedence and keeping the company costs in check.
Regards,
Preetam Deshpande
From India, Mumbai
Acknowledge(0)Amend(0)
Dear Ganesh ji,
You can pay more than the minimum. No one will ask you why you paid more. But you cannot pay less than the minimum. If you pay less than the minimum, you will definitely be asked. There is no upper limit. But whatever you pay should be justifiable.
From India, Mumbai
Acknowledge(0)Amend(0)
You can pay more than the minimum. No one will ask you why you paid more. But you cannot pay less than the minimum. If you pay less than the minimum, you will definitely be asked. There is no upper limit. But whatever you pay should be justifiable.
From India, Mumbai
Acknowledge(0)Amend(0)
Respected Ganesh Kadam Law always speaks about minimum thing which you and org has to do. maximum is your limit ... there is no MAX limit .......
From India, Hyderabad
Acknowledge(0)Amend(0)
From India, Hyderabad
Acknowledge(0)Amend(0)
Dear Ganesh,
In order to keep the fixed headcount low, it is appropriate for the organization not to absorb them. However, this does not prevent you from paying them above the minimum wages act. You may want to review the past trends to understand how their increments have typically been - 5-8% every year or something else. This analysis may provide you with insights on how to position them currently.
Furthermore, it implies that there may be existing staff members who have seniority in terms of tenure and are on your payroll, yet due to average performance, their salaries have not increased significantly. You may need to consider that the annual raises you provide to both such staff members could eventually lead to the contract staff receiving equal or higher compensation than the in-house staff after a couple of years.
Kind regards, [Your Name]
From India, Mumbai
Acknowledge(0)Amend(0)
In order to keep the fixed headcount low, it is appropriate for the organization not to absorb them. However, this does not prevent you from paying them above the minimum wages act. You may want to review the past trends to understand how their increments have typically been - 5-8% every year or something else. This analysis may provide you with insights on how to position them currently.
Furthermore, it implies that there may be existing staff members who have seniority in terms of tenure and are on your payroll, yet due to average performance, their salaries have not increased significantly. You may need to consider that the annual raises you provide to both such staff members could eventually lead to the contract staff receiving equal or higher compensation than the in-house staff after a couple of years.
Kind regards, [Your Name]
From India, Mumbai
Acknowledge(0)Amend(0)
You can pay anything above than the minimum wages but you cannot pay lower than whatever prescribed therefore it is called minimum wages Act
From India, Mumbai
Acknowledge(0)Amend(0)
From India, Mumbai
Acknowledge(0)Amend(0)
Dear Preetam ji,
"You may get caught in the provisions of the Equal Remuneration Act."
I fully agree with you. The Equal Remuneration Act belongs to a bygone era. This Act is outdated today. We should make a representation to the Government to discard it. The Form D register under it, if not maintained, leads to a fine of 25k. Enforcing Officers also do not know how to maintain it. They want you to make it black and white.
"Better ask the contractor to provide them with an award or something, such as a cash award of Rs. 10,000, by which you can appreciate their contribution without creating any precedence and keeping the company costs also in check."
It is a good suggestion.
From India, Mumbai
Acknowledge(0)Amend(0)
"You may get caught in the provisions of the Equal Remuneration Act."
I fully agree with you. The Equal Remuneration Act belongs to a bygone era. This Act is outdated today. We should make a representation to the Government to discard it. The Form D register under it, if not maintained, leads to a fine of 25k. Enforcing Officers also do not know how to maintain it. They want you to make it black and white.
"Better ask the contractor to provide them with an award or something, such as a cash award of Rs. 10,000, by which you can appreciate their contribution without creating any precedence and keeping the company costs also in check."
It is a good suggestion.
From India, Mumbai
Acknowledge(0)Amend(0)
Dear Ganesh ji, It is not your prerogative to increase the wages of contract labour. Hope you understand what I mean to say.
From India, Mumbai
Acknowledge(0)Amend(0)
From India, Mumbai
Acknowledge(0)Amend(0)
Dear Preetam Deshpande,
In my company, to avoid the unhappy or imbalanced situation about wages, I have categorized the performance of the workers, which is communicated with all CONTRACTUAL ASSOCIATES. The point you raised about an increase in minimum wages leading to an overall increase in liability is also valid, and I will definitely consider it. The idea of a cash award is a good one, but I will need to check with Senior Management.
Thank you for your suggestions.
Regards,
Ganesh
From India, Pune
Acknowledge(0)Amend(0)
In my company, to avoid the unhappy or imbalanced situation about wages, I have categorized the performance of the workers, which is communicated with all CONTRACTUAL ASSOCIATES. The point you raised about an increase in minimum wages leading to an overall increase in liability is also valid, and I will definitely consider it. The idea of a cash award is a good one, but I will need to check with Senior Management.
Thank you for your suggestions.
Regards,
Ganesh
From India, Pune
Acknowledge(0)Amend(0)Engage with peers to discuss and resolve work and business challenges collaboratively - share and document your knowledge. Our AI-powered platform, features real-time fact-checking, peer reviews, and an extensive historical knowledge base. - Join & Be Part Of Our Community.
Latest gujarat 6 pay modified.xls
VARIABLE PAY.doc