Settlement Calculations

MINIMUM WAGES

The concept of Minimum Wages was first

evolved by ILO in 1948 with reference to

remuneration of workers in those industries

The 28th Indian Labour Conference in

1985 recommended a national basic subsistence

level wage below which no wages may

be fixed regardless of the nature of work, nature

of employment and other considerations.

Rs,35/- per day in 1996

Rs.40/-per day in 1998 and further to Rs.45/- w.e.f. 30.11.1999,

In sub-section 3) of Section 26 (i) In a factory where there is carried on

any scheduled employment in respect of which minimum rates of wages have been fixed under this Act, any person named under clause (f) of sub-section (1) of Section 7 of the Factories Act, 1948, as manager of the factory

(ii) in any scheduled employment under the control of any Government in India in respect of which minimum rates of wages have been fixed under this Act, the person or authority appointed by such Government for the supervision and control of employees or where no person of authority is so appointed the Head of the Department .

Minimum wage fixation… Rates can be fixed on basis of hour, day or month, or even larger period. [section 3(3)(b)]. - - The rate shall consist of basic rate of wages with or without allowance for cost of living allowance based on ‗cost of living index number.

Bonus Act

According to the bonus act 1965 Every factory (as def. in Factories Act), ii)  Employees‘ who are drawing remuneration of Rs. 3,500/- or more and those who are not worked 30 days they are not eligible to receive bonus under the Act.iii) Bonus to be paid within eight months from the expiry of the accounting year.

Eligilibity

Every person (other than an apprentice) drawing salary up to RS 3,500 per month.

More Than 4000 his/her basic means we Should Take maximum Basic as 3750 for bonus calculation.

Subject to other provisions :— Minimum bonus shall be 8.33% of salary/wages earned or RS 100 whichever is higher.

Roll Employees : Basic/ Month Days* No of days Present = Total months*8.33%

For e.g. : basic: 2445 ,month : January means

No of days present : 30 2445/31*30= 2336* 8.33% = 197

Trainee Employees :: Basic/ Month days * No of Days Present = Total Months* 8.33%* 60%

EMPLOYEES’ PROVIDENT FUND ACT1952

The object of the Act is the institution of compulsory contributory Provident Funds, Pension and Insurance for employees.

12% From Employee Contribution From his basic :

Basic*12%For eg: 2445*12%= 293

More than 6500 basic means As per rules we Should taken 780 as maximum contribution of PF SchemeCalculation Basic :7519 meansWe Should taken this calculation : 780/Month

Days * Working daysFor eg: 780/31(month January means : 31) * If

he is coming 21 days means 780/31*21=528

THE EMPLOYEES’ STATE INSURANCE SCHEME

The ESI Act provides for health care and cash benefit payments in the case of sickness, maternity

The ESI Scheme is operated in 678 centres and employment injury.

As of now, over 78.65 lakh insured persons and about 303.73 lakh beneficiaries are covered under the Scheme.

Calculation

Basic*1.75% = 2445*1.75%= 42.7

Not Applicable for more than Getting salary

1,80,000 P.A.

ESI MEDICAL INFRASTRUCTURE (As on 31.3.2003) Number of ESI Hospitals 142 Number of ESI Annexes 43 Number of Beds constructed in ESI Hospitals 23,856 Number of Beds in ESI Annexes 867 Number of Beds Reserved in State Govt. Hospitals. 4000

Number of Insurance Medical Practitioners (IMPs) 6812

Number of ESI Dispensaries 1447 Number of Panel Clinics 2651

The Payment of Gratuity Act

The Payment of Gratuity Act, 1972 applies to factories and other establishments employing ten or more persons. On completion of five years service, the employees are entitled to payment of gratuity @15 days wages for every completed year of service or part thereof in excess of six months subject to a maximum of Rs.3.50 lakh.

In Gratuity We should submit two

Form FForm I It’s a nominee form in case any death or

anything happen means who next authorized person to get the amount.

Calculation

Basic*15/26* no. of years e.g. : Basic = Rs. 10,000/-

No. of years = 5 years

Gratuity = 10,000*15/26*5= Rs. 28,846.15/-

HRA As per the Indian income tax law, the HRA

exemption should be calculated as the least of the following.1. Rent paid in excess of 10% of basic salary.2. Actual HRA received by the employee.3. Forty percent of basic salary, if the location of the residence is in a non-metro city/town or 50% of basic salary, if the location of the residence is in a metro city

Leave Credit

As per the factory law we should given 1.25Days leave per month If his/her Not taken leave we should give as a salary

Holiday WagesFestival or National Holidays we should

given salary if he is present means we should given double salary

Calculation: Basic/Month days* Holidays Days

AllowancesAs per Factories law We should given Medical AllowanceEducation AllowanceCalculation:Medical AllowanceHalf of the Basic Salary/12* no of monthEducation Allowance67rs * No of month