Fixation of Basic Pay -
MAMTA BATRA
(Querist) 26 February 2011
This query is : Resolved
We are a multinational company with a number of subsidiaries and some 300 staff on the rolls. Presently, we calculate basic pay of staff upon joining, at 40% of CTC.
As we know, Delhi Government from time to time issues guidelines for revision of minimum wages of non-skilled, semi-skilled and skilled workers. However, no rules or directives are available anywhere with regard to the modalities to be followed for fixing Basic pay of such staff. Companies follow their own best practices in determining basic pay.
Seeking your learned advice, if we could follow a uniform pattern of fixing basic pay at 40% of CTC for all junior staff as well including non-skilled, semi-skilled and skilled workers upon joining.
samiullah sayyed
(Expert) 27 February 2011
YES YOU CAN VERY WELL DO SO,BUT BEFORE DOING SO YOU SHOULD TALK TO YOUR C.A. AS WELL AS PROVIDENT FUND CONSULTANT .
Guest
(Expert) 27 February 2011
Dear Mamta,
No harm to fix Basic Pay at 40% of CTC, provided the BP so fixed, does not fall below the Minimum Wages at any time, as fixed/revised by the Government from time to time. It must not be forgotten that the Minimum Wages under the Minimum Wages Act is considered as the barest minimum from which the wages of any person should not fall below that at any time. That has to be allowed at any cost. So, you can formulate the BP norm accordingly.
PS Dhingra
Chief Executive Officer
Dhingra Group of Management & Vigilance Consultants
New Delhi-110089
Mobile: 09968076381
[dcgroup1962@gmail.com]
M V Gupta
(Expert) 28 February 2011
I fully agree with the views expressed by Shri. Dhingra.
MAMTA BATRA
(Querist) 04 March 2011
Mr Dhingra finds no harm in fixing BP at 40% so long as the BP is not less than the Minimum Wages. Governments of Maharashtra and Karnataka have announced Minimum Wages and also BP and in both cases the BP is below Minimum Wages. In Maharashtra till Dec 2010 Minimum Wages were 4724/-,4624/- and 5424/- for Unskilled, Semi-skilled and Skilled workers and the BP was 70.5% of the Minimum Wages. The Notification now issued for Minimum Wages w.e.f. 01.01.2011 raises the Minimum Wages to 6291/-,5891/-and 5491/- and also the BP from the earlier 70.5% to 92%. While we as a multi-national Company with branches in different Metros would be obliged to stick to the Minimum Wages as fixed by different State Governments, can we have a standard Basic Pay of 40% for all staff so that the PPF deductions are not affected and more money and cash is left in the hands of the staff.
