Is the salary break up of your employees, labour-law complaint?

Dear Reader,

Over the years one of the most common questions, I have been asked is

What is the “correct” salary break-up of guards or out-sourced employees covered under minimum wages act?

In this letter, I would be attempting to “de-mystify” all the heads that are applicable to guards / outsourced employees covered under minimum wages act.

I claim to be no expert in this area but by virtue of heading a manpower intensive business and having gone through various inspections do have a fair idea about it. The break-up is supposed to be compliant with ESI, PF, Bonus, Minimum wages amongst other acts.

Let me explain with an example of an ideal break-up of Security Guard doing 8 hours of work.

S No.	Head	Amount	Remarks
1	Basic – Minimum Wages	15,000	Assumed Minimum wages for Unskilled (non-matriculate)
2	Relieving Charges @ 16.67 % (for 7^th Day of working)	2,501	N.A. for where staff works for 6 days.
3	Total Minimum Wages (MW)	17,501
4	Leave @ 6.73 % of Total MW	1,178	Total of 37 days leave (CL-12, EL-15, Festivals & national holidays -10)
5	PF @ 13 % of 60% of Total MW (Basic)	1,495	Our view is you can deduct PF by bifurcating minimum wages into Basic plus other heads as long as Basic is reasonable, say 60% of minimum wages. However, service provider cannot claim full PF from client and deposit only on bifurcated amount.
6	ESI @ 3.25 % of Total MW	569
7	Bonus @ 8.33 % of Total MW	1,458	Minimum bonus payable is 8.33% of minimum wages though terms and conditions apply.
8	Uniform Allowance	200	Mandatorily to be given to service providers as they are not supposed to charge the employee for it.
9	Total	22,401
10	Service Charges @ 10 % of above	2,240	N.A. for non-service providers and cannot be an unreasonable figure like 2% so as seeming to encourage service provider to cheat.
11	Gross Total	24,641

The majority of heads remain common whether a person is an outsourced or a direct guard.
By the way, I do not charge this much ???? as most of you guys would not pay.
I hope it helps. Feel free to connect with me if you need any help including how to handle these issues “creatively”? I and/or HOD – Personnel Department will be happy to engage with you / your employee.

Regards,

Ravi Kapur