I'm seeking clarification on a salary-related matter. Is it permissible under the Minimum Wages Act for Uttar Pradesh to offer a CTC of ₹9800 while the actual in-hand salary for employees is ₹8500?
I would greatly appreciate any insights or experiences regarding this scenario. Thank you for your time and expertise.
From India, Lucknow
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I would greatly appreciate any insights or experiences regarding this scenario. Thank you for your time and expertise.
From India, Lucknow
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Minimum Wages Act or notification of minimum wages does not contain any word called CTC. The Act only says the minimum wages below which no employer should pay wages, and as observed by the Supreme Court in Crown Aluminium Company case (Crown Aluminium Works vs Their Workmen-1958 AIR 30, 1958 SCR 651), "no industry has a right to exist unless it is able to pay its workmen at least a bare minimum wage." Therefore, first see what is the statutory wages fixed, and then add the employer's contributions towards ESI and PF to arrive at the CTC. Many employers take the monthly value of the bonus payable annually to make the CTC much bigger. It should not be worked out from the net (take-home) salary but it should be worked out from the gross salary before deducting the employee's share of ESI, EPF, etc.
A person getting a take-home salary of Rs 8500 should be an unskilled worker. By adding the employer contributions to the salary and by inflating it to Rs 9800, i.e., CTC, what is the benefit that you gain? He may accept the job thinking that he would get 9800 every month. If so, you will be cheating the poor worker. This may even create an unnecessary scene and disputes. Therefore, as far as possible, never use the CTC concept to lure persons belonging to workers. You can use CTC, but only when the salary is much above the market cost of labour and in respect of employees who can understand what CTC is. This is my personal opinion.
From India, Kannur
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4758A person getting a take-home salary of Rs 8500 should be an unskilled worker. By adding the employer contributions to the salary and by inflating it to Rs 9800, i.e., CTC, what is the benefit that you gain? He may accept the job thinking that he would get 9800 every month. If so, you will be cheating the poor worker. This may even create an unnecessary scene and disputes. Therefore, as far as possible, never use the CTC concept to lure persons belonging to workers. You can use CTC, but only when the salary is much above the market cost of labour and in respect of employees who can understand what CTC is. This is my personal opinion.
From India, Kannur
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