We have changed Basic+VDA as per the mandate from Karnataka Minimum Wages Act. If an employee is drawing a gross salary of Rs. 90,000, we have given him an appointment letter stating Basic+DA as Rs. 30,000 and other allowances as Rs. 60,000. Is there any mandate or rule to fix a minimum percentage on basic? Since in the above case it is almost 33.33%, and it differs from employee to employee.
From India, Bengaluru
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From India, Bengaluru
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Hi Mohammed Asif,
Minimum wages are fixed for different categories of employees. You need to pay Basic + DA as per the minimum wages schedule. There is no rule on what percentage of Basic and DA needs to be paid. Basic + DA should be more than the minimum wages.
From India, Bengaluru
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129Minimum wages are fixed for different categories of employees. You need to pay Basic + DA as per the minimum wages schedule. There is no rule on what percentage of Basic and DA needs to be paid. Basic + DA should be more than the minimum wages.
From India, Bengaluru
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Janaab Mohd Asif, In addition to the above, generally the companies follow 40% or around, of the total CTC as Basic Pay.
From India, Khargone
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From India, Khargone
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There is no specific rule for this. However, 33.33% is reasonable and there should not be any issue. But Basic+DA should not be less than the minimum wage declared by the State Government.
From India, Bhubaneswar
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From India, Bhubaneswar
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Dear Masifhe,
You have not specified to which category these kinds of employees belong. Normally, state/central governments do not set minimum wages for such highly-paid positions. To quote specific directions, the Government of Punjab has already included this clause in its minimum wage notification, stating that "The minimum wages fixed/revised shall be the basic rates of wages."
This point was also clarified by the Honorable Supreme Court of India in Airfreight Ltd Vs. State of Karnataka in 1999.
Regards,
Jacob Pratap
From India, Chandigarh
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You have not specified to which category these kinds of employees belong. Normally, state/central governments do not set minimum wages for such highly-paid positions. To quote specific directions, the Government of Punjab has already included this clause in its minimum wage notification, stating that "The minimum wages fixed/revised shall be the basic rates of wages."
This point was also clarified by the Honorable Supreme Court of India in Airfreight Ltd Vs. State of Karnataka in 1999.
Regards,
Jacob Pratap
From India, Chandigarh
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Minimum Wage in Maharashtra DA Special allowance w.e.f January 1, 2020 to June 30, 2020.pdf
Minimum Wages Basic-DA.xls