On September 11, 2024, the Labour Department of Tamil Nadu issued a significant notification Revising the minimum wages for employment in shops and commercial establishments.
Key Highlights of the Notification
1. Dearness Allowance (DA): The new minimum wage structure includes a dearness allowance linked to the Average Consumer Price Index (CPI) of Chennai City. The base for this calculation is set at 161 points for the year 2010 (with the base year being 2001=100). Here’s how the DA will work:
- For every point above 161, an additional ₹40.18 will be added to the monthly wages.
- The DA will be recalculated annually on April 1, based on the average CPI from January to December of the previous year.
- The first calculation under this new structure will be effective from September 11, 2024.
2. Classification of Zones: To ensure fair wage distribution across different areas, the notification classifies regions into four zones:
- Zone A: All corporations and Special Grade Municipalities
- Zone B: All Municipalities, excluding Special Grade
- Zone C: Townships, Town Panchayats, and Cantoments
- Zone D: All other locations not classified above
3. Equal Pay for Equal Work: A noteworthy aspect of the new regulation is the commitment to gender equality in wage distribution. There will be no distinction in payment between male and female employees performing the same work.
4. Daily Wage Calculation: To determine daily wages, the new monthly wages will be divided by 26, ensuring transparency and consistency in payment.
5. Existing Wages Protection: If current wages are higher than the newly established minimum, employers are required to continue paying the existing higher wages.
