Dear friends, I need a clarification on the following issues can you help me pls.....................

I have a recently seen a payslip of one of the manufacturing units in Hyderabad, its a pay slip of a worker category person. Designation as Mechanical Operator.

his Payslip Shows following components:

Basic Pay


Fixed DA

Rationalisation allowance.............

My doubts are as follows...............

1) can we show DA and fixed DA as two components in the same structure??

2) According to Minimum wages Act an operator comes under skilled category. and his basic + DA as specified in Act is 5375+1075. But the company is trying to protect this minimum wages as Basic+ DA+ Fixed DA. Is it a correct process according to law??? PF is being deducted from all three Components Basic+DA+fixed DA.

3) here employees basic constitutes of very nominal percentage of aprx.15 % of gross salary. and DA is even less than Rs.500 but they are showing rest of the Minimum basics in Fixed DA.

4) lastly want to know what is that rationalisation allowance???

5) And for components like LTA, Medical Reimbursement Basic + DA is only being considered.

Are the above procedures are legal????

Thanks And Regards,

Deepti Bandi

From India , Hyderabad
The important thing to remember is, one cannot deprive an employee of the minimum benefits that he should receive under the provisions of Minimum Wages Act. If under the law the minimum basic and special DA is "X", one cannot reduce it to "X minus "Y" by splitting the wages in to different heads like VDA "Fixed DA"etc. In many organisations "Fixed DA" is given to the employees which is a part of VDA. This is done by separating thef VDA up to a particular index point. As long as there is no difference between "minimum wage due" and "Minimum wage paid", one should have no worries.
As regards the "rationalisation allowance" it is difficult to say for what this is being paid as it is specific to the organisation where you are working. You should get this information from the organisation.
The term minimum wage has been defined under the Act and allowances which will be part of minimum wage has also been defined. The compliance should strictly be on that basis.

From India , Nagpur
Dear Cyril
I would like to inform you that I am continue follower you and your views and agreed with every views but here i am not agree with you that Under the minimum wages act 1948 sec. 2 (h) "wages" means all remuneration, capable of being
expressed in terms of money, which would, if the terms
of the contract of employment, express or implied, were
fulfilled, be payable to a person employed in respect
of his employment or of work done in such employment,
1*[and includes house rent allowanc]
So please specifies that Minimum wages means Basic + HRA or only Basic
If minimum wages means Basic+HRA then we can split the basic wages
Please suggest

From India, Delhi

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