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Following Maruti Suzuki’s 50% hike in pay for its Gurgaon factory workers, Hyundai Motor, India’s number two car maker, has agreed a 45% increase over three years for its plant staff.

Hyundai’s settlement with the United Union of Hyundai Employees is effective from 1 April this year and will run through to 31 March, 2015.

The Economic Times said the average rise at Hyundai is INR14,283 (US$266) a month per worker including variable components.

Analysts said wage realignment has been coming given the labour environment prevailing in the country. Maruti Suzuki set the benchmark and Hyundai India had to follow suit.

Rajeev Dubey, national president of the Employers’ Federation of India (EFI), told ET that all companies would have to balance the need to be competitive, yet be fair to employees. He added: “The exact increase will vary from unit to unit. But it is a difficult balancing act which companies will have to strive to maintain.”

Hyundai is also taking care of medical insurance and has increased housing loan interest subsidies.

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By GlobalData

Maruti Suzuki last month increased salaries for Gurgaon workers by an average INR18,000 (US$335) a month as part of a three-year wage settlement, the highest-ever hike in its 30-year history.