Dear All, Mimimum Wage is yet revised and this time by big margin. The notification states basic 6500 and DA 1232 summing to total of 7732. Now we have been paying a gross salary to our contractual staff more than 7732, but that included components like washing allowance HRA but the basic we were paying is lesser than what the new declaration advises. Do I need to revise the basic is order to be compliant. Or since the gross is more than what is stated, no revision is necessary.
From India, New Delhi
5From India, New Delhi
Hi,
You can check/refer the minimum wages Act or Payment of Wages Act. Its very clear that any allowances could be a part of your break up. Basic salary can be bufricated to any number of break ups and to keep DA as actual. Its not necessary to keep the basic wages as per the gazzette in under the name of Basic. But you have to ensure that PF is paid for Minimum wages. If your washing allowances are not a part of minimum wages, you have to increase the basic.
You can check/refer the minimum wages Act or Payment of Wages Act. Its very clear that any allowances could be a part of your break up. Basic salary can be bufricated to any number of break ups and to keep DA as actual. Its not necessary to keep the basic wages as per the gazzette in under the name of Basic. But you have to ensure that PF is paid for Minimum wages. If your washing allowances are not a part of minimum wages, you have to increase the basic.
Does this mean that if cr. sal for my contractual staff is : basic =5500 and gross = 8000. A the MW gets revised to 7732 with detail that basic to increase to 6500/-. I do not need to revise the current sal as my currents sal (8000) is more than the new MW ( 7732) but ensure that PF is paid on 7732.
From India, New Delhi
From India, New Delhi
Hi,
yes minimum wages is the least you can pay for your employee. Minimum of Rs.7732 has to be there in your payroll and no one has to be fixed below that. In tour case you can revise the structure and proceed.
Secondly, yes if you pay PF for minimum wage is well and good. But ensure you cant reduce the existing benefit of any employee. Its only for the employees who are joined at the entry level. Pls dont restrict to Minimum wages because this would be the only savings of any employees.
yes minimum wages is the least you can pay for your employee. Minimum of Rs.7732 has to be there in your payroll and no one has to be fixed below that. In tour case you can revise the structure and proceed.
Secondly, yes if you pay PF for minimum wage is well and good. But ensure you cant reduce the existing benefit of any employee. Its only for the employees who are joined at the entry level. Pls dont restrict to Minimum wages because this would be the only savings of any employees.
Just afterthought, you mean for existing employees I need to increase the basic to 6500/- from 5500/- even though the gross is already more (8000) than what has been specified in new declaration (7732).
From India, New Delhi
From India, New Delhi
Hallo
As per the verdict given by Hon.Supreme Court in case Airfreight the Minimum Wages constitute the amount inclusive of all allowances. So you need not to revise Salary. But I disagree with the opinion that P.F. contribution is required to be paid on minimum wages.
The P.F. Act says that contribution shall be paid on Basic + D.A. not on allowances. And there is no amendment in that till today.
The P.F. office had issued one circular directing contributions to be paid on Minimum Wages. But that has challenged and several high courts given verdict that circular is bad in law. Therefore P.F. Office has issued another circular keeping previous circular in abeyance.
So at present p.f. authorities cannot ask to pay p.f. contribution on minimum wages.
if any doubts , feel free to ask me.
Mukund Kulkarni
As per the verdict given by Hon.Supreme Court in case Airfreight the Minimum Wages constitute the amount inclusive of all allowances. So you need not to revise Salary. But I disagree with the opinion that P.F. contribution is required to be paid on minimum wages.
The P.F. Act says that contribution shall be paid on Basic + D.A. not on allowances. And there is no amendment in that till today.
The P.F. office had issued one circular directing contributions to be paid on Minimum Wages. But that has challenged and several high courts given verdict that circular is bad in law. Therefore P.F. Office has issued another circular keeping previous circular in abeyance.
So at present p.f. authorities cannot ask to pay p.f. contribution on minimum wages.
if any doubts , feel free to ask me.
Mukund Kulkarni
Hi Mukund, Now PF authorities are asking to pay PF for allowance except HRA (that too exempted upto 20%). We recieved a note from them and we paid PF for allowance too.
HI
It depends on your salary breakup, as we discussed earlier, if you have basic and DA alone, yes you have to increase the basic. If you have more components, split those by increse the basic and reduce in any components.
In a simplier terms, its about minimum wages and not about gross/fixed wage. Minumum wages is only applicable for the employees who are getting the least salary in your company. A person should not be fixed below specified MW.
It depends on your salary breakup, as we discussed earlier, if you have basic and DA alone, yes you have to increase the basic. If you have more components, split those by increse the basic and reduce in any components.
In a simplier terms, its about minimum wages and not about gross/fixed wage. Minumum wages is only applicable for the employees who are getting the least salary in your company. A person should not be fixed below specified MW.
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Minimum Wage of UP & UK.pdf