Statutory Salary Structure

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[QOTE=vianney castelino;20202]HR consultants are of the view that the Basic Salary should be atleast 50% of the Gross Salary. Are there any guidelines in the Min Wage Act or any other Act or Code that will dictate what the min. Basic Salary can be.

We have come up with a structure as:

1. Basic

2. HRA = 50% of Basic

3. Convey= 50% of Basic

4. Medical = 1250 p.m

5. Week End Comp = (sum 1to4)*8/30 (comp for Sat & Sun)

6. Mobility Allow = Rs. 200 p.day (for cell & data card usage)

7. Hardship Allow = 50% of Basic

Total = Gross Salary (1to7)

Deductions are std . PF, PT etc.

i.e If a Monthly Gross is approx Rs. 12000 can his Basic be Rs. 1950? with the above allowances?

Will ESIC be applicable?

Please advise............thanx[/QUOTE]

Dear

There is no Act which spells out that 50% of the Gross should be basic. In fact, Wages are governed by the Minimum Wages Act which are applicable to the industries/services which are listed in the schedule to the act. Only in such cases, the Wages and DA should be as per law.

In other cases, Wages (either basic + DA) or Basic alone should be reasonable quantum of the gross. Normally, based on the IT Act, people adopt the following structure.

1. Basic
2. DA
3. HRA - 50% of Basic
4. Conveyance - Max. 800 per month
5. Medical Allowance / or Reimbursement - Rs.15000/- per annum i.e. Rs.1250/- per month

Other allowances and perquisites may vary depending upon the industry/establishment/management.

G.SANKARANARAYANAN
HR CONSULTANT 98402 15500

Please let us know what will be the salary structure as per wages act in a manufacturing company ? If some ones gross salary is 5000 what will be his basic ?