Who said HRA has been removed from the Labour Codes?
What is HRA? HRA is nothing but an allowance paid to those employees who are asked to stay in a rented house in connection with the business. It is not an allowance available universally to all the employees of the organisation but it is an allowance paid only to those who resides in rented houses. Since this is an allowance paid to meet a particular expense, ie, rent, it is excluded from the definition of wages. Since Indian employers have the practice of finding out which all are the allowances which will not qualify for their contributions like Bonus, leave encashment, gratuity, PF, retrenchment compensation etc, they made HRA as a part of the remuneration. They did not take it as part of salary for PF, Bonus, Gratuity etc but took it as part of salary to deduct the salary for the days the employee remained on leave without pay!
The new labour Code was expected to remove this confusions but the authorities who made the Codes made it more complicated. The answer to one question, ie, if the salary for deciding loss of pay is gross salary, why should there be a different salary for payment of PF, Bonus, overtime wages, leave encashment or gratuity, remains unanswered.
From India, Kannur
4238What is HRA? HRA is nothing but an allowance paid to those employees who are asked to stay in a rented house in connection with the business. It is not an allowance available universally to all the employees of the organisation but it is an allowance paid only to those who resides in rented houses. Since this is an allowance paid to meet a particular expense, ie, rent, it is excluded from the definition of wages. Since Indian employers have the practice of finding out which all are the allowances which will not qualify for their contributions like Bonus, leave encashment, gratuity, PF, retrenchment compensation etc, they made HRA as a part of the remuneration. They did not take it as part of salary for PF, Bonus, Gratuity etc but took it as part of salary to deduct the salary for the days the employee remained on leave without pay!
The new labour Code was expected to remove this confusions but the authorities who made the Codes made it more complicated. The answer to one question, ie, if the salary for deciding loss of pay is gross salary, why should there be a different salary for payment of PF, Bonus, overtime wages, leave encashment or gratuity, remains unanswered.
From India, Kannur
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
HRA-Unit 2.ppt
Reclassificatio n of towns for HRA for central govt employees 21.7.2015.pdf
HRA.doc