Hi, anyone can help on this Q : What are the principles of wage fixation? Please ........ waiting for your prompt response, Regards, Laxmi
From India, Mumbai
From India, Mumbai
I think its determination of minimum wages or fringe benefits.
The concept of “Minimum Wage” stands for different standard of different countries. The fair wage committee in India has observed that in India the level of the national income is so low at present that it is generally accepted that the country cannot afford to prescribe by law a minimum wage must provide not merely for the bare sustenance of life but for the preservation of the efficiency of the worker. Thus, a minimum wage is one, which may be sufficient to enable worker to live in reasonable comfort having regard to all obligations to which an average worker would ordinally be subject.
As the major production cost, wages affect profits, business investment, competitiveness, and are a cost push inflationary factor. As the major income in the economy, wages affect standard of living, income distribution and poverty, and demand pull inflation.
At the source of wage disputes is the employer treating wages as their major cost, and the employee viewing wages as their major income.
The following principles have always been the bases of the wage determination process.
All are economically valid. At different stages they have collectively, and singularly, been used to determine wage increases.
1. Preserving real income: This is the argument used by employees and Unions viewing wages as an income. Following this principle usually results in wages being indexed to inflation. In periods of rising inflation, indexation becomes a problem of an institutionalised wage-price spiral. Underlying aspects that have also impacted on real wage preservation arguments have been a "basic" minimum wage, and comparative wage justice.
2. Labour productivity: A valid economic theory connects wages to labour productivity. Conflict arises over the measurement of productivity. Rewarding labour with a wage increase when technology, and/or capital investment, increases labour efficiency, may not be justified.
3. The capacity of business to afford wage increases: This emphasises wages as a cost of production, and the threat of wage increases to squeeze profits. This "capacity" argument is that followed by business owners.
4. The capacity of the Economy to absorb wage increases: This "capacity" argument views the macro impact of wage increases on inflation, competitiveness, and other aspects of internal and external balance; as well as the affect on business profits and investment from 3. This is the main argument of the Federal Government recognising the macro policy potential of an Incomes Policy to address external and internal balance goals to supplement demand management policies, and the effects on income distribution.
Generally wage determination can be through a centralised, regulated, institutionalised system, or a decentralised system. Collective bargaining is when workers with similar employment conditions and skills unite, usually through a union, to present their wage demands to their employer(s). Enterprise bargaining is when workers at the same plant bargain with the employer. An award is an agreement that sets out both wages and working conditions. Our reliance on a centralised system, often based on indexation, has dominated wage determination over the last century.
From India, Mumbai
1The concept of “Minimum Wage” stands for different standard of different countries. The fair wage committee in India has observed that in India the level of the national income is so low at present that it is generally accepted that the country cannot afford to prescribe by law a minimum wage must provide not merely for the bare sustenance of life but for the preservation of the efficiency of the worker. Thus, a minimum wage is one, which may be sufficient to enable worker to live in reasonable comfort having regard to all obligations to which an average worker would ordinally be subject.
Principles of Wage Determination
At the source of wage disputes is the employer treating wages as their major cost, and the employee viewing wages as their major income.
The following principles have always been the bases of the wage determination process.
All are economically valid. At different stages they have collectively, and singularly, been used to determine wage increases.
1. Preserving real income: This is the argument used by employees and Unions viewing wages as an income. Following this principle usually results in wages being indexed to inflation. In periods of rising inflation, indexation becomes a problem of an institutionalised wage-price spiral. Underlying aspects that have also impacted on real wage preservation arguments have been a "basic" minimum wage, and comparative wage justice.
2. Labour productivity: A valid economic theory connects wages to labour productivity. Conflict arises over the measurement of productivity. Rewarding labour with a wage increase when technology, and/or capital investment, increases labour efficiency, may not be justified.
3. The capacity of business to afford wage increases: This emphasises wages as a cost of production, and the threat of wage increases to squeeze profits. This "capacity" argument is that followed by business owners.
4. The capacity of the Economy to absorb wage increases: This "capacity" argument views the macro impact of wage increases on inflation, competitiveness, and other aspects of internal and external balance; as well as the affect on business profits and investment from 3. This is the main argument of the Federal Government recognising the macro policy potential of an Incomes Policy to address external and internal balance goals to supplement demand management policies, and the effects on income distribution.
The Methods of Wage Determination
From India, Mumbai
Fixation of Minimum Wages in India
The minimum wages covers all workers in the sectors agricultural, industrial and small-scale sectors.
This means:
From India, Mumbai
The minimum wages covers all workers in the sectors agricultural, industrial and small-scale sectors.
This means:
- farm labourers
- landless labourers
- factory workers
- people working in cottage industries
- construction workers etc.
From India, Mumbai
Dear Sirs
I am being asked to bifurcate the Consolidated Amount of Wage Rs.4000/- for a Skilled worker (daily Min wage is Rs.116/-) and to put it in a tender for outsourcing the service by giving the details of calculation of the EPF, ESI deductions from the Employee Salary (Rs.4000/- Consolidated) and Employer side also.
I have calculated as follows
Per Day Min wage- Es.116/-
wage per 26 working days - Rs.116 x 26 = Rs.3016/-(Basic)
Rs.4000/- Rs.3016 = Rs.984/- Other Allowances
EPF @ 12% of Rs.3016 ..................... and ESI also on that
Am i Correct in my calculation or Not ??
What will be the rule/practices for bifurcation of the Rest Rs.984/- (Other allowances) in to different aspects like DA/HRA/etc..
Please guide me in this regards
Pragatika Mishra
From India, Bhubaneswar
I am being asked to bifurcate the Consolidated Amount of Wage Rs.4000/- for a Skilled worker (daily Min wage is Rs.116/-) and to put it in a tender for outsourcing the service by giving the details of calculation of the EPF, ESI deductions from the Employee Salary (Rs.4000/- Consolidated) and Employer side also.
I have calculated as follows
Per Day Min wage- Es.116/-
wage per 26 working days - Rs.116 x 26 = Rs.3016/-(Basic)
Rs.4000/- Rs.3016 = Rs.984/- Other Allowances
EPF @ 12% of Rs.3016 ..................... and ESI also on that
Am i Correct in my calculation or Not ??
What will be the rule/practices for bifurcation of the Rest Rs.984/- (Other allowances) in to different aspects like DA/HRA/etc..
Please guide me in this regards
Pragatika Mishra
From India, Bhubaneswar
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