Hello All,
Am Working as HR Professional in one of the leading brand. As we all know, recently Govt. has revised Minimum Wages for each category/Zones. i.e for Jul'2020- Dec'2020.
My doubt:
1> Being a pvt company , Is it mandatory to revise?
2> If above is yes, then how to revise without affecting Annual CTC & Inhand salary??. For Ex: One Skilled employee has current Basic+DA as 12,350 and now have to make it 12,532( newly revised MW for Skilled-Zone 1- Engineering). Employee's monthly gross salary is 30149 (basic+HRA+All other allowances).
Please provide valuable insights..
From India, Pune
10Am Working as HR Professional in one of the leading brand. As we all know, recently Govt. has revised Minimum Wages for each category/Zones. i.e for Jul'2020- Dec'2020.
My doubt:
1> Being a pvt company , Is it mandatory to revise?
2> If above is yes, then how to revise without affecting Annual CTC & Inhand salary??. For Ex: One Skilled employee has current Basic+DA as 12,350 and now have to make it 12,532( newly revised MW for Skilled-Zone 1- Engineering). Employee's monthly gross salary is 30149 (basic+HRA+All other allowances).
Please provide valuable insights..
From India, Pune
1..Min. Wages notification is applicable to all. No exception to any industry or sector.
2. You are paying much more than the minimum wages, so long as that is the position you need not worry about compliance. The wage factor could be as decided by you, there is no requirement to strictly follow the notification of bifurcation of Min. wages
From India, Mumbai
2. You are paying much more than the minimum wages, so long as that is the position you need not worry about compliance. The wage factor could be as decided by you, there is no requirement to strictly follow the notification of bifurcation of Min. wages
From India, Mumbai
Dear Friend,
Minimum Wage Act is applicable to the industries listed as scheduled industry.
If your company is falling under any of the schedule industry then irrespective of the ownership of your company (i.e. whether it is propriety or LLP / Partnership or Pvt Ltd or Ltd), you need to follow minimum rates of wages.
It seems you are from Engineering Industry. MWA is applicable to you.
Now, it will be a big question, which industry or sector is excluded from schedule industry?
To my knowledge teaching staff is not industry. All other industries which are not covered under schedule employment are either covered under residuary factories or under shops and commercial establishment.
From India, Mumbai
Minimum Wage Act is applicable to the industries listed as scheduled industry.
If your company is falling under any of the schedule industry then irrespective of the ownership of your company (i.e. whether it is propriety or LLP / Partnership or Pvt Ltd or Ltd), you need to follow minimum rates of wages.
It seems you are from Engineering Industry. MWA is applicable to you.
Now, it will be a big question, which industry or sector is excluded from schedule industry?
To my knowledge teaching staff is not industry. All other industries which are not covered under schedule employment are either covered under residuary factories or under shops and commercial establishment.
From India, Mumbai
Dear Anamik,
First of all your query is incorrect.
The Revised MW for Engineering Industries for Skilled Category (Zone I) for the period July 2020 to December 2020 is as under:
Basic : Rs. 7,800
Special Allowance : Rs. 4,536
Total : Rs.12,336 (and not 12,532 as you mentioned)
HRA Minimum 5%: Rs. 617
Gross Total Rs. 12,953
Now as far as you are paying salary/wages more than the MW, you need not worry about any prosecution from Labour department. However, if you wish to have same salary (Basic+DA) as per MW you may do it by reducing the differential amount from the other allowance component. With this solution the employees salary will remain same and you will also get satisfaction. I don't think there will be any additional impact on PF because you must be deducting PF on gross salary minus HRA or Rs.15,000/- ceiling, whichever is higher.
Hope this will solve your problem.
Second alternative is during Annual Appraisal / increment you can round up basic wages by additional Rs.1000 to 1500 as the half yearly MW revision is around Rs.500/- per month.
Regards,
Suresh
From India, Thane
First of all your query is incorrect.
The Revised MW for Engineering Industries for Skilled Category (Zone I) for the period July 2020 to December 2020 is as under:
Basic : Rs. 7,800
Special Allowance : Rs. 4,536
Total : Rs.12,336 (and not 12,532 as you mentioned)
HRA Minimum 5%: Rs. 617
Gross Total Rs. 12,953
Now as far as you are paying salary/wages more than the MW, you need not worry about any prosecution from Labour department. However, if you wish to have same salary (Basic+DA) as per MW you may do it by reducing the differential amount from the other allowance component. With this solution the employees salary will remain same and you will also get satisfaction. I don't think there will be any additional impact on PF because you must be deducting PF on gross salary minus HRA or Rs.15,000/- ceiling, whichever is higher.
Hope this will solve your problem.
Second alternative is during Annual Appraisal / increment you can round up basic wages by additional Rs.1000 to 1500 as the half yearly MW revision is around Rs.500/- per month.
Regards,
Suresh
From India, Thane
Dear Suresh ji,
Good observation as to the rate of Minimum Wages. I read only the first doubt of the queriest and the response by our learned friend KK!HR.
If I am the employee and you are revising my basic quantum i.e. Basic plus cost of living by adjusting my allowances keeping my gross and PF deduction intact, I will still object to it. Lets discuss on this point.
From India, Mumbai
Good observation as to the rate of Minimum Wages. I read only the first doubt of the queriest and the response by our learned friend KK!HR.
If I am the employee and you are revising my basic quantum i.e. Basic plus cost of living by adjusting my allowances keeping my gross and PF deduction intact, I will still object to it. Lets discuss on this point.
From India, Mumbai
Dear Suresh,
In the revised MWA(Jul-Dec'20), Special Allowance for Engineering Industry-Zone 1 is : 4732. Hence Basic + SA = 7800+4732= 12,532/-
@Others: Really thanks for your views. This helps.
From India, Pune
In the revised MWA(Jul-Dec'20), Special Allowance for Engineering Industry-Zone 1 is : 4732. Hence Basic + SA = 7800+4732= 12,532/-
@Others: Really thanks for your views. This helps.
From India, Pune
@ Mr. Suresh & Mr Akhil..
Yes, a good point to discuss. Because if we increase basic by adjusting amount from other component (ex: Adhoc Allowance-Balancing amount) , Gratuity, HRA, Medical, Convy. , LTA(in my company) components also gets increased , as they are driven by Basic Salary.
So eventually, his entire CTC structure gets disturbed!
Regards
From India, Pune
Yes, a good point to discuss. Because if we increase basic by adjusting amount from other component (ex: Adhoc Allowance-Balancing amount) , Gratuity, HRA, Medical, Convy. , LTA(in my company) components also gets increased , as they are driven by Basic Salary.
So eventually, his entire CTC structure gets disturbed!
Regards
From India, Pune
Basic + D A + HRA are statutory payment cannot be reduced below rates fixed by the Govt. The allowances granted by company can be adjusted after strenghthening the statutory structure of wages so that the worker's interest towards PF ESI contribution and Gratuity and Retrenchment compensation (if need be) will not be affected. There will not be any violation of labour laws related to payment of above mentioned statutory dues.
From India, Pune
From India, Pune
Dear Anamik,
Extremely sorry, I erroneously picked up 1st half Special Allowance.
However, I still suggest, you can discuss with the concerned employee and with his consent revised the pay structure till next salary revision. Because every 6 months you are going to face this problem.
Again as suggested earlier, don't change your existing pay structure, as you are already paying double the MW and hence not violating any Govt. Rules.
Besides you may require to wait for another month or two, as the decision on Code on Wages 2019 is expected shortly. During that time you are bound to pay 50% amount of gross salary as a Basic salary.
Regards,
Suresh
From India, Thane
Extremely sorry, I erroneously picked up 1st half Special Allowance.
However, I still suggest, you can discuss with the concerned employee and with his consent revised the pay structure till next salary revision. Because every 6 months you are going to face this problem.
Again as suggested earlier, don't change your existing pay structure, as you are already paying double the MW and hence not violating any Govt. Rules.
Besides you may require to wait for another month or two, as the decision on Code on Wages 2019 is expected shortly. During that time you are bound to pay 50% amount of gross salary as a Basic salary.
Regards,
Suresh
From India, Thane
Dear Anamik Friend,
Further to the last post by our learned member Suresh ji,
The COW is an enactment as on date, yet to enforced soon on passing the rules framed under it. Central Rules are finalised, may get assent any time by the President. CTC restructuring has to be done by you keeping in mind the provisions in this COW as correctly and timely suggested by Suresh ji.
From India, Mumbai
Further to the last post by our learned member Suresh ji,
The COW is an enactment as on date, yet to enforced soon on passing the rules framed under it. Central Rules are finalised, may get assent any time by the President. CTC restructuring has to be done by you keeping in mind the provisions in this COW as correctly and timely suggested by Suresh ji.
From India, Mumbai
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
Salary-Note.doc
SALARY SHEET CALCULATION.xls