Applicability Of Minimum Wages On Engineers Staff - PDF Download

Dear Seniors,
I am working in an Oil Industry, where many contractors are working in my organization and they have engaged a number of workmen, i.e. Labour Category, Supervisory Staff, Technical Staff & some also engaged Engineers as Contract Workmen.
During inspection of the register and records we found that some contractor who have Engineers on permanent basis or contract basis, being paid basic wages less than minimum wages (5000/- pm including DA, but for skilled category it is 8034/- as govt decided) but their gross salary is more than 20,000/- pm.
My queries are :
Is it the against minimum wages act?
Does engineers comes under Minimum wages? If yes, in which category they will come (Skilled / Highly Skilled) and what shall be their minimum Basic Wages?
Pl give your valuable advise / support.

To answer your query, you must first read the notification of MW for employment in engineering published in March 2014. As you have already pointed out, there are only 3 categories viz-skilled, semi skilled and unskilled. The notification does not talk of labels or designations i. e. manager, supervisor, mukadam, accountant, clerk, engineer etc. But it says, a minimum of this much of wages are payable. Obviously, no body should be paid less than the MW notification. Once a MW wage is declared as Rs. 8,034 (Basic + Sp. Allow.), what is paid over and above the Minimum level is hardly a concern of MW Act. Thus keeping Basic and SA as low as possible and gross increased by showing a variety of Allowances is the pattern adopted by almost all employers just to keep PF contribution as low as possible. For engineers why a MW is required? For technocrats, there cannot be a legal MW but, rules of demand and supply, experience, aptitude and skills, ability and quality etc do prevail and the package is decided.

Minimum wages act applies to every scheduled employment in the country.
It's applicable irrespective of type of work or designation or qualification, so long as it is listed in the scheduled employment (which is practically every job anyway).
Minimum wages act specifies that basic + da must be above
There is no excuse not to pay it.
The fact that other allowances take it higher is immaterial under law.
You as principal employer will be liable for differential wages, PF, esic and penalty.
You need to have to salary taken higher.
Also note you can not restructure the salary now as it will run fowl of PF requirement which prohibits reduction of salary to pay part or whole of PF dues of the employee. You need to increase the salary by the difference between min wages and current fare.....

Dear Sachin ji,
My to the point answer to your questions as given below:
Yes, it is against the MW Act. In Maharashtra, minimum wage constitute Basic & Sp.Allw/DA and not gross salary. You can not split the gross in such a way by which Basic and Sp. Allw/DA component is lesser than MW rate declare by Govt.
Engineers comes under MW. They are in Skelled category. You are in Oil Industry and you fall under the schedule industry- Oil Mill. Minimum Wage Rate as on date to this schedule industry for skilled category in Zone I (Maharashtra) is Basic Rs. 5300.00 + Sp.Allw Rs. 2913.75 = Rs. 8213.75 pm.

It would be worthwhile to study the Judgment of Hon'ble Supreme Court in Airfreight Ltd. Vs. State of Karanataka where the issue inter alia was involved was whether the employer has to maintain the components of wages as declared by MW notification. In the said case, Employer was paying wages higher than MW, but under various heads and no separate DA was paid for which the matter went up to the Apex Court. The Apex Court negatived the contention that "Basic and DA are to be separately maintained" as per notification and reversed the observations of Karnataka High Court.
However, this judgement is taken to disadvantage and the wage components are so arranged that the basic and da is just as low as possible so that PF contribution is minimum. At many places, both contributions are deducted from wages, hence the employees also do not seem to be bothered about the framework of wages.
The Judgement of Supreme Court is Uploaded for benefit of all.

So, the judgement means that in case employer is paying gross wages (less certain specified allowances like hra) more than minimum wages, they are compliant ?
Then why are the state governments specifying basic plus da ? They can specify total wages instead. The intent is not being met. Or did I read the judgement wrong ?