Dear Seniors, Please advise for the below-mentioned: We are a Manpower supplier company. One of our follows the minimum wages of the central government. Our Employees are working at this client's place in Mumbai. The client is denying to pay HRA to these employees stating that since they are following central wages in Maharashtra - HRA won't be applicable. Is it a valid reason to deny HRA? Our stand is to pay a minimum of 5% HRA to the employees.
Your earliest revert will be highly appreciated.
Thanks
From India, Mumbai
1Your earliest revert will be highly appreciated.
Thanks
From India, Mumbai
If the client establishment is covered by the Central Minimum Wages, the employees deployed in that establishment need to be paid wages according to Central Minimum Wages. If that is satisfied then there is no legal issue. Obviously, when you send the same employee to some other establishment where the Maharashtra Minimum Wages is applicable, you can demand for HRA as part of wages. Therefore, so long as the wages paid is not below the statutory minimum wages fixed at any point of time, you cannot demand some component over and above the it.
From India, Kannur
From India, Kannur
Hi Santosh,
. For specific legal advice regarding your situation, it's recommended to consult with a labour attorney or legal expert in your jurisdiction.
In India, both central and state governments can set minimum wages, and employers are required to comply with the higher of the two rates (central or state). In Mumbai, Maharashtra, the state government sets its own minimum wages.
Regarding HRA (House Rent Allowance), this is typically provided to employees to help them meet the cost of accommodation, and it's a common component of a compensation package. While the central government may set certain guidelines, it's important to note that state governments may have their own regulations regarding HRA.
In your case, if your employees are working in Mumbai, Maharashtra, and the state government's minimum wage includes a provision for HRA, it is generally expected that this should be followed. The central government's guidelines are meant to be a minimum standard, and employers are expected to adhere to the higher of the two standards (central or state).
If your client is denying HRA based on following central wages, and Maharashtra's HRA is applicable, this could potentially be in violation of the state's labour laws. It would be advisable to consult with a labour lawyer or legal expert in Maharashtra to get specific advice about your situation.
It's important to ensure that you are in compliance with all relevant labour laws and regulations to protect both your company and your employees.
Thanks
From India, Bangalore
. For specific legal advice regarding your situation, it's recommended to consult with a labour attorney or legal expert in your jurisdiction.
In India, both central and state governments can set minimum wages, and employers are required to comply with the higher of the two rates (central or state). In Mumbai, Maharashtra, the state government sets its own minimum wages.
Regarding HRA (House Rent Allowance), this is typically provided to employees to help them meet the cost of accommodation, and it's a common component of a compensation package. While the central government may set certain guidelines, it's important to note that state governments may have their own regulations regarding HRA.
In your case, if your employees are working in Mumbai, Maharashtra, and the state government's minimum wage includes a provision for HRA, it is generally expected that this should be followed. The central government's guidelines are meant to be a minimum standard, and employers are expected to adhere to the higher of the two standards (central or state).
If your client is denying HRA based on following central wages, and Maharashtra's HRA is applicable, this could potentially be in violation of the state's labour laws. It would be advisable to consult with a labour lawyer or legal expert in Maharashtra to get specific advice about your situation.
It's important to ensure that you are in compliance with all relevant labour laws and regulations to protect both your company and your employees.
Thanks
From India, Bangalore
Dear Seniors,
Thanks for your inputs. But if we refer the Maharashtra Minimum HRA Act, it clearly states that every establishment employing more than 50 employees in Maharashtra needs to pay atleast 5% HRA to its employees. It is different from Minimum wages act. So it needs to be followed separately and should not be substituted with Minimum wages Act.
From India, Mumbai
Thanks for your inputs. But if we refer the Maharashtra Minimum HRA Act, it clearly states that every establishment employing more than 50 employees in Maharashtra needs to pay atleast 5% HRA to its employees. It is different from Minimum wages act. So it needs to be followed separately and should not be substituted with Minimum wages Act.
From India, Mumbai
Santosh Kondam only asked the question and we all gave our suggestion. Now Santosh himself has come up with the answer. If the solution was known to him then why did he ask the question?
Santosh, the Maharashtra Minimum wages contain an element called HRA. For example, for Unskilled, if the wages for Zone 1 cities is, say, Rs 12500, the same contains a basic salary, VDA and HRA. If you pay Rs 12500 to an unskilled worker without any bifurcation, you are said to comply with the legal requirements and there is no need to pay VDA or HRA in addition to the amount paid. The Supreme Court in Airfrieght India Vs State of Karnataka, it was clarified that so long as the employer is paying wages above the minimum wages, he is said to comply with the legal requirements and there is no need to pay VDA which is a part of minimum wages as per notification. The same principle will apply to you also and if your wages for a particular category of employee is not less than the Basic+ VDA+ HRA fixed by the government for that particular scheduled employment, there is no need to pay VDA or HRA in addition to the total amount paid.
From India, Kannur
Santosh, the Maharashtra Minimum wages contain an element called HRA. For example, for Unskilled, if the wages for Zone 1 cities is, say, Rs 12500, the same contains a basic salary, VDA and HRA. If you pay Rs 12500 to an unskilled worker without any bifurcation, you are said to comply with the legal requirements and there is no need to pay VDA or HRA in addition to the amount paid. The Supreme Court in Airfrieght India Vs State of Karnataka, it was clarified that so long as the employer is paying wages above the minimum wages, he is said to comply with the legal requirements and there is no need to pay VDA which is a part of minimum wages as per notification. The same principle will apply to you also and if your wages for a particular category of employee is not less than the Basic+ VDA+ HRA fixed by the government for that particular scheduled employment, there is no need to pay VDA or HRA in addition to the total amount paid.
From India, Kannur
Dear Santosh,
You have not specified which scheduled industry your Principal Employer comes under:
If your Principal Employer (PE) is licensed by the Central Licencing Authority, you are exempt from paying HRA because it applies to the entire country and is always much greater than any other scheduled employment in the country.
If the firm is in real estate (building construction), the State Minimum Wage for Building and Other Construction Workers will apply, with a 5% HRA on Basic + VDA. This is the country's highest MW. (God only knows what reasoning or cost of leaving index is taken into account or utilized in this industry.)
I am providing the Central and State Minimum Wages published by Shri Tej Bahadur, the Deputy Chief Labour Commissioner, Mumbai on 12.10.2023 for Employment in Construction or Maintenance and in Building Operations for members' convenience..
Regards,
Suresh
From India, Thane
You have not specified which scheduled industry your Principal Employer comes under:
If your Principal Employer (PE) is licensed by the Central Licencing Authority, you are exempt from paying HRA because it applies to the entire country and is always much greater than any other scheduled employment in the country.
If the firm is in real estate (building construction), the State Minimum Wage for Building and Other Construction Workers will apply, with a 5% HRA on Basic + VDA. This is the country's highest MW. (God only knows what reasoning or cost of leaving index is taken into account or utilized in this industry.)
I am providing the Central and State Minimum Wages published by Shri Tej Bahadur, the Deputy Chief Labour Commissioner, Mumbai on 12.10.2023 for Employment in Construction or Maintenance and in Building Operations for members' convenience..
Regards,
Suresh
From India, Thane
It should be the revised basic rates of wages. See that the VDA (special allowance) is very low and this implies that a portion of the DA has been merged to the Basic pay to arrive at the revised scales for this particular industry.
It is not the highest in India because in Kerala almost all sectors where minimum wages have been revised in recent years have similar hike in salary.
From India, Kannur
It is not the highest in India because in Kerala almost all sectors where minimum wages have been revised in recent years have similar hike in salary.
From India, Kannur
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Minimum Wages in Maharashtra for the period January 2018 to June 2018.xls
Minimum Wages Maharashtra 01.01.2020 to 30.06.2020_Mara thi Version.pdf