I want to know something and that is, can employer fix the basic da and retaining allowance more than 50% to evade the statutory benefits like esi and EPF.. suppose employee drawing monthly wages is 28000 per month. And as per new norms minimum 50% basic da and retaining allowance need to maintain but what employer can assign basic da retaining allowance more than 50% because in new wages code minimum word expressed i.e 50% and maximum word expressed. So what employer do to set 28000 per month salary. Basic 15100 da 3000 and retaining 3000 so total becomes 21100 which crossed the pf ceiling and esi ceiling and remaining 6900 show other allowance like HRA and conveyance etc.... so this is how employer can evade from esi and EPF..
Kindly overview it and remark on it
Also urge to all of you when this new rule is going to commence
From India, Chandigarh
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140Kindly overview it and remark on it
Also urge to all of you when this new rule is going to commence
From India, Chandigarh
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The question you've raised is quite significant and it's important to understand the legal implications of such practices.
Firstly, the core issue here is whether an employer can manipulate the basic DA and retaining allowance to evade statutory benefits like ESI and EPF. This can affect the employee's benefits and the employer's compliance with labour laws.
From a legal standpoint, the new wage code in India stipulates that the basic pay and allowances of an employee should be at least 50% of the total remuneration. However, it doesn't specify a maximum limit. This is to ensure that the statutory benefits which are linked to the basic pay (like EPF and gratuity) are not diluted.
However, it's important to note that while the law doesn't specify a maximum limit, any attempt to evade statutory benefits could be seen as a violation of the spirit of the law. Employers are expected to act in good faith and not structure the salary components to deprive employees of their statutory benefits.
As for your specific example, while technically it seems possible, it could potentially raise red flags with the authorities. If the authorities find that the employer is manipulating the salary structure to evade statutory benefits, they could face penalties.
In terms of what you can do, if you suspect that your employer is engaging in such practices, you could raise the issue with your HR department or with a labour law consultant. You could also report the matter to the relevant authorities.
Finally, as for when the new rule is going to commence, it's best to keep an eye on updates from the Ministry of Labour and Employment. They will announce the commencement date of the new wage code.
Remember, it's important to understand your rights as an employee and to ensure that you're receiving the benefits you're entitled to. Don't hesitate to seek advice if you're unsure about anything.
From India, Gurugram
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Firstly, the core issue here is whether an employer can manipulate the basic DA and retaining allowance to evade statutory benefits like ESI and EPF. This can affect the employee's benefits and the employer's compliance with labour laws.
From a legal standpoint, the new wage code in India stipulates that the basic pay and allowances of an employee should be at least 50% of the total remuneration. However, it doesn't specify a maximum limit. This is to ensure that the statutory benefits which are linked to the basic pay (like EPF and gratuity) are not diluted.
However, it's important to note that while the law doesn't specify a maximum limit, any attempt to evade statutory benefits could be seen as a violation of the spirit of the law. Employers are expected to act in good faith and not structure the salary components to deprive employees of their statutory benefits.
As for your specific example, while technically it seems possible, it could potentially raise red flags with the authorities. If the authorities find that the employer is manipulating the salary structure to evade statutory benefits, they could face penalties.
In terms of what you can do, if you suspect that your employer is engaging in such practices, you could raise the issue with your HR department or with a labour law consultant. You could also report the matter to the relevant authorities.
Finally, as for when the new rule is going to commence, it's best to keep an eye on updates from the Ministry of Labour and Employment. They will announce the commencement date of the new wage code.
Remember, it's important to understand your rights as an employee and to ensure that you're receiving the benefits you're entitled to. Don't hesitate to seek advice if you're unsure about anything.
From India, Gurugram
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Maharashtra DA,Special allowance July 14 to Dec 14 - Notification.pd f
Minimum Wages Basic-DA.xls
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(Fact Checked)-While it's true some organizations may have higher Basic and DA, it's important to note that manipulating these to evade statutory benefits like ESI and EPF may not be legal or ethical. Always ensure compliance with labor laws. (1 Acknowledge point)