Suppose we undertake a contract work for a Central Govt undertaking, which minimum wages shall be followed?

Suppose we undertake a contract work for a Central Govt undertaking, which minimum wages shall be followed? Should we adhere to the state minimum wages applicable to the district or the central minimum wages? Experts are welcome to provide their insights.

Pon

Dear Pon,

It is central minimum wages only. Please visit the below site: [Central Sphere](http://www.paycheck.in/main/officialminimumwages/central-sphere)

Dear Shenbagarajan,

Our company has taken a contract with a Central Government Undertaking. Our company has given subcontracts for various construction works. Initially, all the subcontractors had applied for a labor license as per the state Act based on the principal employer's certificate and implemented the state minimum wages as applicable. After 2 years, the principal employer (in this case, the Central Government Undertaking) has notified us to implement the central minimum wages. Our company's subcontractors are approaching us for reimbursement of the difference in wages citing statutory variation. What should we do in this case?

Pon

Dear Pon,

Normally, contractors provide manpower to various companies, factories, or establishments in the state as well as to central government offices. For establishments other than central government offices, they pay minimum wages as per the State act. Since your company is subcontracting, you should also adhere to the same standards set by the central wages.

As the profit margin will be tight, you cannot compel the central government office to increase the wages since the contract is awarded to the bidder with the lowest quote. Meanwhile, you must ensure that the subcontractor is paid the right rate.

Here, your only option is to negotiate with the subcontractors and find a mutually beneficial solution, as both parties depend on each other for contractual work.

Thank you.