Hi Im working in an Interior designing firm , We recently had a salary revision to our employees .
I have the following doubts to be clarified before proceeding with the revision letter .
1. Do i need to consider the basic salary as per new wage code (ie, 50% of gross salary is considered for basic ).
2. is DA mandatory to be given and a separate component in the salary slip
3. Is there any written rule for the above .
From India, Thiruvananthapuram
I have the following doubts to be clarified before proceeding with the revision letter .
1. Do i need to consider the basic salary as per new wage code (ie, 50% of gross salary is considered for basic ).
2. is DA mandatory to be given and a separate component in the salary slip
3. Is there any written rule for the above .
From India, Thiruvananthapuram
There is no need to give DA so long as the total salary is equal to or more than the minimum wages fixed by the government which would include a basic salary and a variable dearness allowance. There is no rule that the basic should be 50% of the total salary. There is a mention about treatment of basic wages in the new labour codes which is lying in the freezers but the objective of that definition is different and would change even when an employee gets overtime wages.
There are companies who believe that the basic salary should be 50% of the total salary. But I would say that if you are not paying dearness allowance as a component of salary, your basic salary should be the sum of basic and DA fixed by the government. And there should be an increase in the salary every year and that should be reflected in this basic salary also.
Remember that an employee is given salary increase for two reasons, one, to compensate increase in cost of living and the other is to reward the performance of the employee. It is easy to evidence these if you have both these components in your salary.
From India, Kannur
4248There are companies who believe that the basic salary should be 50% of the total salary. But I would say that if you are not paying dearness allowance as a component of salary, your basic salary should be the sum of basic and DA fixed by the government. And there should be an increase in the salary every year and that should be reflected in this basic salary also.
Remember that an employee is given salary increase for two reasons, one, to compensate increase in cost of living and the other is to reward the performance of the employee. It is easy to evidence these if you have both these components in your salary.
From India, Kannur
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