Dear Seniors
pls advice on topic. confusing since long time _ not found any suitable appropriate solution,
In Punjab State Minimum wage(s) was Rs. 7623.50 ( AS ON 01-09-2017)
Suppose in case salary of an employee is 10000/- , breakup as
BASIC 7650/- ( more than MW)
HRA Allw. 1350/-
Convy.Allw. 500/-
Washing Allw. 500/-
Total 10000/-
now the minimum wages have been increased to 7852.17 ( w.e.f. 01/03/2018)
some one told that you are paying Rs. 10000/- that is more than MW , you do not need not change basic as per MW.
some one told that you have to change the Basic , as per MW .
if we change the Basic salary , ESI & EPF figures are effected. , there are Changes in MW twice in a year. Should we change basic salary as per Minimum wages.
pls suggest what is the best optimum solution
waiting for reply & advice.
pls provide the document if any available for justifying !!
thanks in advance.
From India, Patiala
3pls advice on topic. confusing since long time _ not found any suitable appropriate solution,
In Punjab State Minimum wage(s) was Rs. 7623.50 ( AS ON 01-09-2017)
Suppose in case salary of an employee is 10000/- , breakup as
BASIC 7650/- ( more than MW)
HRA Allw. 1350/-
Convy.Allw. 500/-
Washing Allw. 500/-
Total 10000/-
now the minimum wages have been increased to 7852.17 ( w.e.f. 01/03/2018)
some one told that you are paying Rs. 10000/- that is more than MW , you do not need not change basic as per MW.
some one told that you have to change the Basic , as per MW .
if we change the Basic salary , ESI & EPF figures are effected. , there are Changes in MW twice in a year. Should we change basic salary as per Minimum wages.
pls suggest what is the best optimum solution
waiting for reply & advice.
pls provide the document if any available for justifying !!
thanks in advance.
From India, Patiala
Dear Gaurav,
The answer to your question has already been provided several times in this portal and you may refer to them.There is no mention in your post about the component of V.D.A in your State Minimum Wages. As per the ratio decidendi of the judgment of the Supreme Court of India in Airfreight Case that if the sum total of the industry wages minus the excluded components from the definition of the term wages under the MW Act,1948 is equal to the sum total of the statutory minimum wages, it is perfect compliance. For example, the monthly Washing Allowance in your industry wage structure can not be treated as wages as per Sec.2(h) of the MW Act,1948. I think that your industry wages are based on long term settlement or unilaterally revised by your management with the acceptance of the employees. But, minimum wages are revised by the appropriate Govt once in 5 years with periodical hike in D.A being linked to one or other Cost of Living Index. Incidentally, both the revisions may not be identical in time. Therefore, keep those components of the MW rates as they are while revising the others in your industry wage structure so as to maintain continuous parity between the industry wages and the statutory minimum wages. This would avoid differences in terms of components as well as other statutory commitments like ESI, EPF, Bonus and Gratuity.
From India, Salem
The answer to your question has already been provided several times in this portal and you may refer to them.There is no mention in your post about the component of V.D.A in your State Minimum Wages. As per the ratio decidendi of the judgment of the Supreme Court of India in Airfreight Case that if the sum total of the industry wages minus the excluded components from the definition of the term wages under the MW Act,1948 is equal to the sum total of the statutory minimum wages, it is perfect compliance. For example, the monthly Washing Allowance in your industry wage structure can not be treated as wages as per Sec.2(h) of the MW Act,1948. I think that your industry wages are based on long term settlement or unilaterally revised by your management with the acceptance of the employees. But, minimum wages are revised by the appropriate Govt once in 5 years with periodical hike in D.A being linked to one or other Cost of Living Index. Incidentally, both the revisions may not be identical in time. Therefore, keep those components of the MW rates as they are while revising the others in your industry wage structure so as to maintain continuous parity between the industry wages and the statutory minimum wages. This would avoid differences in terms of components as well as other statutory commitments like ESI, EPF, Bonus and Gratuity.
From India, Salem
Special allowances if part of minimum wages whether considered for gratuity calculation Ex Maharashtra industry
From India, Ahmedabad
From India, Ahmedabad
Dear friends,
As far as the terminal benefit of gratuity is concerned, the Payment of Gratuity Act,1972 is a complete Code in itself. Every special Law has definitions of its own in respect of certain general terms finding place in it. We have to assign the particular definition in the Act in relation to any term thus defined for the purpose of the Act and no more further interpretations different from the meaning originally assigned to that term. Sec.2(s) of the P.G Act,1972 defines the term - " 'wages' means all emoluments which are earned by an employee while on duty or on leave in accordance with the terms and conditions of his employment and which are paid or payable to him in cash and includes dearness allowance but does not include any bonus, commission, house rent allowance, over time wages and any other allowance. " Therefore, in any wage structure comprising of different components under the contract of employment or any other Law, only the components of basic and dearness allowance should be taken as wages for the purpose of computation of gratuity. If the wages are a consolidated sum without components, then the entire consolidated amount has to be taken into account .
From India, Salem
As far as the terminal benefit of gratuity is concerned, the Payment of Gratuity Act,1972 is a complete Code in itself. Every special Law has definitions of its own in respect of certain general terms finding place in it. We have to assign the particular definition in the Act in relation to any term thus defined for the purpose of the Act and no more further interpretations different from the meaning originally assigned to that term. Sec.2(s) of the P.G Act,1972 defines the term - " 'wages' means all emoluments which are earned by an employee while on duty or on leave in accordance with the terms and conditions of his employment and which are paid or payable to him in cash and includes dearness allowance but does not include any bonus, commission, house rent allowance, over time wages and any other allowance. " Therefore, in any wage structure comprising of different components under the contract of employment or any other Law, only the components of basic and dearness allowance should be taken as wages for the purpose of computation of gratuity. If the wages are a consolidated sum without components, then the entire consolidated amount has to be taken into account .
From India, Salem
question is still unsolved? also searched other posts on this matter, not any final conclusion .
pls confirm if basic is less than minimum wages is it Ok or not.
or have to note basic equal to minimum wages ?
gratuity , special allowance :- out of questions asked.
pls reply only on basic & minimum wages matter
TIA
From India, Patiala
pls confirm if basic is less than minimum wages is it Ok or not.
or have to note basic equal to minimum wages ?
gratuity , special allowance :- out of questions asked.
pls reply only on basic & minimum wages matter
TIA
From India, Patiala
Dear Gaurav,
I think that you have to re-read my answer. I've clearly explained what the parity between the statutory minimum wages and the industry wages is when they have components which are different both in types and scales.
Similarly, my mention about bonus, gratuity, subscription to ESIC,EPFO etc., are not irrelevant or out of question as the difference or dissimilarity in basic as well as D.A between the two scales would lead to unnecessary industrial disputes eventually.
From India, Salem
I think that you have to re-read my answer. I've clearly explained what the parity between the statutory minimum wages and the industry wages is when they have components which are different both in types and scales.
Similarly, my mention about bonus, gratuity, subscription to ESIC,EPFO etc., are not irrelevant or out of question as the difference or dissimilarity in basic as well as D.A between the two scales would lead to unnecessary industrial disputes eventually.
From India, Salem
Dear All
PFA copy of Punjab Govt's Gazette Notification specifying that the entire Minimum Wages fixed by the Govt should be treated as Basic Wages in which case the MW notified by the Punjab Govt from time to time shall be considered for all statutory payment like PF , Gratuity, Bonus etc.,
Regards
N Nataraajhan (E-mail:
)
From India, Bangalore
PFA copy of Punjab Govt's Gazette Notification specifying that the entire Minimum Wages fixed by the Govt should be treated as Basic Wages in which case the MW notified by the Punjab Govt from time to time shall be considered for all statutory payment like PF , Gratuity, Bonus etc.,
Regards
N Nataraajhan (E-mail:
From India, Bangalore
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.
State minimum Wage-01-04-2017 (VDA).pdf