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 (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

From India , Mumbai
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.
HR CONSULTANT 98402 15500

From India , Madras
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