7th Pay Commission Minimum Wage and Fitment Formula

| June 18, 2015

The Staff Side (JCM) has calculated minimum wage as on 1st Jan 2014 as per the Dr. Aykroyd formula as Rs 26,000/- taking into following prices.

minimum-wage

The 7th CPC also would adopt Dr. Aykroyd formula for the computation of the minimum wage and thereafter the fitment formula is calculated.

Fitment formula = Minimum wage / Rs 7000

The Staff Side (JCM) has calculated the fitment formula of 3.72  that is  Rs 26000/ Rs 7000 as on 1st Jan 2014.

The 7th CPC has hinted that the date of effect of the 7th CPC shall be from 1st Jan 2016.  In this context the minimum wage and fitment formula, should be as follows.

The increase in prices between 1st Jan 2014 to 1st July 2015 is 18% as the DA as on 1st Jan 2014 was 100% and likely DA as on 1st July 2015 is 118%, In actual terms the retail prices have increased by over 25%. Even considering the 18% hike in prices from 1st Jan 2014 to 1st July 2015 and adding 7 % likely hike in prices for the period 1st July 2015 to Jan 2016 it works out to 25% hike in minimum wage.

Minimum wage calculated by the Staff Side (JCM) using Dr. Aykroyd formula as on 1st Jan 2014 was Rs 26,000/-

Adding 25% hike in prices between 1st Jan 2014 to 1st Jan 2016,   the minimum wage should be Rs 32,000/- and accordingly the fitment formula should work out to 4.5 times.

If we calculate the minimum wage as on 1/1/2016 using the Dr. Aykroyd formula taking into account the current retail prices in Bangalore. It works out Rs 27,000/- and fitment formula as 3.85.

7th-CPC-Min-wage-2016 (1)

There are many rumors on the fitment formula and minimum wage, actually the 7th CPC has made only a draft and they will calculate the actual fitment formula and minimum wage only next month taking into the account the prices as on 1st July 2015 and adding weight age for the period 1st July 2015 to Jan 2016 and work out the fitment formula and minimum wage.

If any fitment formula less than 3.85 and minimum wage of Rs 27,000/- it will be denial of right wages for CG employees.

During the 6th CPC the Staff Side (JCM) has calculated minimum wage as on 1st Jan 2006  as per the Dr. Aykroyd formula as Rs 10,000/-, where as the 6th CPC had provide the minimum wage as Rs 7000/- and  the 6th CPC had fixed fitment formula of 1.86. Most of the pay commissions have accpeted  70% of the staff side demand. We sincerely hope this 7th Central Pay Commission  will also calculate the right wages and fitment formula for the Central Government Employees.

Source:http://karnatakacoc.blogspot.in/2015/06/minimum-wage-and-fitment-formula.html

Category: News, Seventh Pay Commission

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