1
Minimum Wages does not include PF and ESIC.
PF and ESIC provisions require contributions from employer as well as employee. It requires employer to contribute to the account of the employee. The provisions also authorizes employer to deduct contributions of employee from his earnigs - the minimum wages.
Contributions by employer are over and above minimum wages to be paid to the employee. Employer can not deduct his share of contibutions from earnings (minimum wages) of the employee.
Example:
If in a region / state minimum wages is Rs. 140 per day and Spl Allowance / DA is Rs. 15 per day (Total Rs. 155 per day),
an employee who has worked for 25 days will earn Rs. 3875 in the month.
His PF contribution (employee's side) will be Rs. 465 which shall get deducted from his earnings. An equal amount of contribution Rs. 465 will have to be added by the employer. A total of Rs. 930 will get deposited in the employee's PF account. Thus making the total Rs. 4340. i.e. Rs. 173.5 per day for that particular month.
However he will take home an amount of Rs. 3410 for that month i.e. Rs. 136.4 per day, which gets confused with minimum wages for the employee.
Similar contribution method applies to ESIC also.
Hope I have been able to provide clarity on the question. I may be corrected wherever wrong / incorrect.
From India, New Delhi
PF and ESIC provisions require contributions from employer as well as employee. It requires employer to contribute to the account of the employee. The provisions also authorizes employer to deduct contributions of employee from his earnigs - the minimum wages.
Contributions by employer are over and above minimum wages to be paid to the employee. Employer can not deduct his share of contibutions from earnings (minimum wages) of the employee.
Example:
If in a region / state minimum wages is Rs. 140 per day and Spl Allowance / DA is Rs. 15 per day (Total Rs. 155 per day),
an employee who has worked for 25 days will earn Rs. 3875 in the month.
His PF contribution (employee's side) will be Rs. 465 which shall get deducted from his earnings. An equal amount of contribution Rs. 465 will have to be added by the employer. A total of Rs. 930 will get deposited in the employee's PF account. Thus making the total Rs. 4340. i.e. Rs. 173.5 per day for that particular month.
However he will take home an amount of Rs. 3410 for that month i.e. Rs. 136.4 per day, which gets confused with minimum wages for the employee.
Similar contribution method applies to ESIC also.
Hope I have been able to provide clarity on the question. I may be corrected wherever wrong / incorrect.
From India, New Delhi
Dear All
Minimum wages includes only Basic & DA. Every year respective state Govt will relese the notification of retes of Minimum wages. they will calculate the points based on cost of living.based on this points tey will fix the rates of wages, its differ from one industry to another industry
From India, Bangalore
Minimum wages includes only Basic & DA. Every year respective state Govt will relese the notification of retes of Minimum wages. they will calculate the points based on cost of living.based on this points tey will fix the rates of wages, its differ from one industry to another industry
From India, Bangalore
Dear Nishu, You seems to be not clear what you want to know. Please be informed that ESI/EPF contribution shall be deducted on M/Wages as applicable in your state. Surendra Verma
From India, Delhi
From India, Delhi
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Splitting of minimum wages for PF in abeyance (1).pdf
Minimum Wages, ESI & PF.pps