It is felt that the state of Tamil Nadu has not fixed min. wages for IT sector.

However you may check with Wages Inspector, O/o Labor commissioner.

The neighboring state of Kerala has done it.

SE Act is applicable to IT companies.

The wages Basic + DA as prescribed in SE Act and Payment of Min wages Act may be looked into. If you are paying more than these you should not be facing issues.

The wages mentioned in the enactments are very low and IT companies pay much higher.

https://www.paycheck.in/main/salary/minimumwages/tamil-nadu

To be competitive you may look into the pay package of other companies.

Valuable advice of learned experts/members is sought.

Dear Kumar,

Thanks a ton for the update!!!1  .

Here my doubt is any specific salary structure is there under the minimum wages act  or any shop and establishment act . (i.e.. if We are paying  Rs.4000 as basic and 2002 HRA how other allowances should be calculated)

Please help me out .

Regards,

Sundar.

Look into Definition of Wage as explained in SE Act Tamilnadu {which may be available at Dept. of labor/SE Inspectorate web site or you can buy from market. Soft copy can be accessed at  https://www.sircoficai.org/download/John%20Moris/2-Shops%20and%20Estabilishment%20act-%20Seminar.pdf  }

“"wages"  means all remuneraf ion, capable

of being expressed in terms of money, which would,

if the terms of th~  contract of employment, express

or implied, were fulfilled, be payable, whether condi-

tionally upon the regular attendance, good work or

conduct or other behaviour of the person employed

or otherwise, to a person employed in respect of his

employment or of work done in such employment,

and includes any bonus or other additional remu-

neration of the nature aforesaid which would be so

payable and any sum payable to such person by rtason

of the termination of his employment, but does not include:…”

Payment of Wages Act:

“"wages" means all remuneration(whether by way of

salary, allowances or otherwise) expressed in

terms of money or capable ofbeing so expressed

which would, if the terms ofemployment, express

or implied, were fulfilled, bepayable to a person

employed in respect of his employment or of work

done in such employment, and includes—“

VDA is mentioned in Payment of Min wages act, is added to basic wages to arrive at basic salary.

Basic salary, DA is fixed components of salary and is guaranteed cash. It is felt that Payment of Min. wages act protects the current salary.

Basic+ DA+ HRA should not be less than min wages.

EPF, Gratuity and Superannuation, OT, Bonus, Leave encashment is based on basic salary. Therefore reducing basic would lower EPF, Gratuity and Superannuation as well. The authorities in EPFO, ESIC may not agree, and allow.

{Employees Provident Fund and Miscellaneous Provisions Act, 1952

12. Employer not to reduce wages etc  

HRA: {from exemption from IT point of view: 50% of basic salary in metro or 40% of basic salary in a non-metro town. For HRA Basic salary is Basic+ DA + Commission based on fixed % of turnover.}

Relate the components of salary with the enactments.

Various components can be:

Special allowance

LTA: { Rs.15000 to save tax}

Medical Reimbursement: {Exempt up to Rs.15000/pa}

Transport Allowance :{ Exempt up to Rs.800/pm}.

Telephone Facility at home;

Food Coupons etc..Exempt up to Rs.60000/pa

 Child education, hostel allowance

City Compensatory allowance

Conveyance allowance

Petrol allowance

The payroll service, labor/HR consultants operating in your state can provide you tailor made payroll for your company.

Dear Kumar,

Many Thanks for your replay. It's very usefule to my  request.

Regards,

Sundar.

For a company who do not have D.A. in their Wage Structure, can anyone suggest whether HRA and other Fixed Allowance like Education Allowance, Special Allowance can be included for calculating Minimum Wages  or the entire Minimum Wages should be shown as BASIC and if balance only should be shown as other allowance.

regards,

Sridhar 

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