wages in india ha ha ha

8/4/2019 Wages in India Ha Ha Ha

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WAGES IN INDIA

MADE BY-Manjari Singh

Alex Ashish Kujur


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WAGE- DEFINITION

Monetary remuneration computed on

hourly, daily, weekly, or piece work basis.

A fixed weekly or monthly wage is usually

called a salary.


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REGULATION OF WAGES

The legal framework for the payment of wages/

salaries is governed by legislations besides the

guidelines for managerial remuneration and

relevant provisions in the Indian Companies Act.


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ONE- PAYMENT OF WAGES ACT,1936

Enacted to ensure that wages payable to

employees are disbursed within the prescribed

limit and no deductions other than those

authorized by law are made by the employers. Coverage

Responsibility for payment of wages- employers, managers,

person responsible to the employer for supervision

Fixation of wage periods

Time of wage payment Deductions

Claims

Payment of undisbursed wages


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TWO- MINIMUM WAGES ACT, 1948

Principal objective is to prevent exploitation of

labor through the payment of unduly low wages.

Fixing of minimum wages Minimum rate of wages

Working hours

Overtime

Employers obligation

Exemptions

Different categories


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THREE- PAYMENT OF BONUS ACT, 1965

Applies to every factory and establishment in

which 20 or more persons are employed on any

day during an accounting year.

Every employee shall be entitled to be paid bonusprovided he has worked for at least 30 working

days in an year.

Disqualification for bonus

Payment of minimum bonus

Payment of maximum bonus

Proportionate reduction in bonus

Set on and set off of allocable surplus

Deductions from bonus

Time limit for payment of bonus


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REGULATION OF MANAGERIAL REMUNERATION

Regulation of managerial remuneration is a

special feature of company law in India. Section 198 of the companies act provides for an overall ceiling of

11% of the net profits as the maximum managerial remuneration

that can be paid by any company in any financial year

Within ceilings, there are sub- ceilings as per section 309, on

remuneration payable to managing director or whole time director

To prevent directors from drawing more money in the guise of

collateral benefits, section 198 explains that the remuneration

shall include the following:

1. any expenditure incurred in providing free accommodation &

other amenities connected therewith;

2. any expenditure incurred in providing any other amenity eitherabsolutely free or at concessional rate;

3. Any expenditure incurred in providing any obligation or service

which in the absence of provision by the company would have to

be incurred by that person;

4. any expenditure incurred in providing life insurance, pension,

annuity or gratuity for any such person, his spouse or child.


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WAGE POLICY AT COMPANY LEVEL

Attraction and retention

Internal equity

External equity

Personal equity

Ability to pay

Pay and performance

Labor costs and productivity

Cost of living

Merit and seniority progression

Motivation

Integrity


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PAY COMPONENTS

Basic wage

Dearness allowance

Allowances


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ISSUES IN WAGE SYSTEM

Divergent concerns of different stakeholders

Problems in ensuring legal compliance for minimum wage legislation

Increasing inequality/disparity between and among employees

Cost cutting compensation resulting in lowering labor standards

Wage differential not based on skill differential

Distortions in executive and managerial remuneration

Frequent changes in tax provisions

Differing preferences of old and new employees


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PAY COMMISSION

APay Commission is a panel of members of the Union Cabinet

of India for raising the salaries of government employees.

It is an administrative system/mechanism that the government of

India set up in 1956 to determine the salaries of government

employees.

The Sixth Pay Commission submitted its report to Finance

Minister P Chidambaram on 4th April . The recommendations of

the commission, when accepted, would provide a bonanza to over

4.5 million central government employees.


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VARIOUS PAY COMMISSION

The First Pay Commission was established in 1956, and since

then, every decade has seen the birth of a commission that

decides the wages of government employees for a particular time-

frame.

The second Pay Commission was set up in August 1957 and gave

its report in two years. The third Pay Commission, set up in April

1970, submitted its report in March 1973.

The recommendations of the Fourth Pay Commission covered the

period between 1986 and 1996. The Fifth Pay Commission

covered the period between 1996 and this year.


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SIXTH PAY COMMISSION In July 2006, the Cabinet approved setting up of the sixth pay

commission. This commission has been setup under JusticeB.N.Srikrishna with a timeframe of 18 months.

The cost of hikes in salaries is anticipated to be about Rs. 20,000 crore fora total of 5.5 million government employees as per media speculation onthe 6th Pay Commission, the report of which is expected to be handedover in late March/early April 2008.

The employees had threatened to go on a nationwide strike if thegovernment failed to hike their salaries. Reasons for the demand of hikesinclude rising inflation and rising pay in the private sector due to theforces of Globalization.

The Class 1 officers in India are grossly underpaid with an IAS officerwith 25 years of work experience earning just Rs.55,000 as his take home

pay. Pay arrears are due from January 2006 till September 2008. Almost all the Government employees received 40% of the pay arrears in

the year 2008 and balance 60% arrears (as promised by Government) hasalso been credited in Government employees account in the year 2009.

The Sixth Pay Commission mainly focused on removing ambiguity inrespect of various pay scales and mainly focused on reducing number ofpay scales and bring the idea of pay bands. It recommended for removal ofGroupd-D cadre.


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SIXTH PAY COMMISSION:

ALLOWANCES AND FACILITIES

All the allowances except dearness allowance will be effective

from September 1, 2008. Children education allowance has been

revised as per recommendations of 6th Pay Commission and will

increase with increasing DA.

An increase by 21 per cent on an average in the salaries of the

government employees has been ensured in the notification.

Employees will get new pay from January 1, 2006 but arrears will

be paid in 2 splits i.e. 40% in 2008-09 and 60% in 2009-2010.

Fitment factor is 1.84 and annual increment at 3%

Annual increment will be given at 4% to high performers in PB-3

subject to 20% of total strength.


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SIXTH PAY COMMISSION:PENSION

BENEFITS

Effective date for implementation of revised pension structure is

January 1, 2006.

Arrears of the pension will be paid in cash in two installments

(40% in 2008-09 & remaining in 2009-10)

Old pensioners will get an increase of 20, 30, 40, 50 and 100%

after attaining the age of 80, 85, 90, 95 and 100 years,

respectively.

Employee completing 20 years of service will get pension equal to

50% of either the pay last drawn or average of emoluments

received during the past 10 month, whichever is more beneficial.


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CONTROVERSY

Several government services, most notably the armed forces have

complained bitterly of downgradation due to pay commissions

exceeding their brief, and introducing anomalies in the relative

scales of pay of government services. At present, the armed forces

have represented to the government for the removal of anomalies

which it is felt that the civil servants on the commission havedeliberately introduced to upgrade themselves vis-a-vis service

officers in the defence forces.


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SECOND PAY COMMITTEE

Over 1.6 million employees working in the estimated 240 central public sectorundertakings (PSUs) are likely to receive a 50 to 60 per cent salary increase,possibly with retrospective effect from January 2006.

The second PSU pay revision committee, headed by former Supreme CourtJustice M Jagannadha Rao, is in advanced stages of finalizing its award and

plans to submit its report to the government soon after.

In 1997, when PSU pays were last revised, the hike in some scales was asmuch as 68 per cent. This time I expect a raise of 55 to 60 per cent, especiallybecause of the overall growth in PSU profitability, a serving director of a top-ranked PSU said .

By this reckoning, the chairman of a schedule A (top-ranked navratnas like

Indian Oil, ONGC and NTPC, among others) central PSU, whose annual costto company (CTC) works out to Rs 12 lakh to Rs 14 lakh, could earn a gross Rs20 lakh after the award.

At the bottom of the PSU pay scale, an entry level attendant in a leadingpower PSU has a CTC of around Rs 22,000 per month, which could go up to Rs

33,000


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