Dear Friends Cud u pls. let me know why basic is considered to be a variable linked to notice pay and the leave encashment? Regards
From India, Hyderabad
From India, Hyderabad
604
Hi..
Most of the companies consider Basic for notice pay & Leave enchashment, the reason is that other allowances such as conveyance, attendance, washing or any other are paid when emp is actually coming to the company. If the employee is not coming to the co. then y to pay conveyance, attendance allowance and others.
This could be one of the logical reason that i feel.
From India, Pune
Most of the companies consider Basic for notice pay & Leave enchashment, the reason is that other allowances such as conveyance, attendance, washing or any other are paid when emp is actually coming to the company. If the employee is not coming to the co. then y to pay conveyance, attendance allowance and others.
This could be one of the logical reason that i feel.
From India, Pune
Thanks for the response friends... However I’d wish to get some notes or some more clarity on the same. Will be glad if any one could enlighten me :-) Regards
From India, Hyderabad
From India, Hyderabad
Hi,
You will need to define these. Incase of Notice pay in-lieu - you have the option to decide if you want to consider basic or all allowances. Similarly incase of leave encashment, you can decide it, if you want to consider only basic or include all allowances.
The reason why you would want to look at notice pay recovery/leave encashment the same is because many a times, notice period gets adjusted with the accumulated leave balance and also for your P&L closure
All that you need to keep in mind is the cash outflow -- the accumulation of leaves and hence the cash outflow; notice period shortfalls, the money that is due from the employee to the organization
From India, Bangalore
You will need to define these. Incase of Notice pay in-lieu - you have the option to decide if you want to consider basic or all allowances. Similarly incase of leave encashment, you can decide it, if you want to consider only basic or include all allowances.
The reason why you would want to look at notice pay recovery/leave encashment the same is because many a times, notice period gets adjusted with the accumulated leave balance and also for your P&L closure
All that you need to keep in mind is the cash outflow -- the accumulation of leaves and hence the cash outflow; notice period shortfalls, the money that is due from the employee to the organization
From India, Bangalore
At the time of termination of employment the employer has to give a notice in writing to a monthly rated workman (of one month or wages in lieu thereof) or a daily rated worman (of 14 days or wages for 13 days in lieu thereof).
Refer to the definition of `wages' under the Payment of wages Act, 1936. It doesn't merey include the basic salary alone. Also refer to provisions of the Industrial Employment (Standing Orders) Act, 1946.
Don't assume things and don't get misled by general comments.
From India
Refer to the definition of `wages' under the Payment of wages Act, 1936. It doesn't merey include the basic salary alone. Also refer to provisions of the Industrial Employment (Standing Orders) Act, 1946.
Don't assume things and don't get misled by general comments.
From India
I am surprised at this query.
The very word "basic" in Basic Pay explains this. There are several statutory compliances and provisions which are based on "Basic Pay" because of its 'basic' nature - it is the "base" or 'basis' for all other calculation.
One can add on any number of allowances as a percentage or proportion of basic pay; e.g. House Rent Allowance, Medical allowance, Leave Travel Allowance etc. to make the Gross pay.
Hope the above clarifies the issue for you.
Warm regards.
From India, Delhi
The very word "basic" in Basic Pay explains this. There are several statutory compliances and provisions which are based on "Basic Pay" because of its 'basic' nature - it is the "base" or 'basis' for all other calculation.
One can add on any number of allowances as a percentage or proportion of basic pay; e.g. House Rent Allowance, Medical allowance, Leave Travel Allowance etc. to make the Gross pay.
Hope the above clarifies the issue for you.
Warm regards.
From India, Delhi
Dear rkjain29
My response was for the the question, as asked by hrhaigreeva; "why basic is considered to be a variable linked to notice pay and the leave encashment?".
I think, the question you are asking now, is slightly different.
You are not asking - "WHY basic pay is considered" but "whether ONLY basic pay should be included or one can include 'guaranteed cash' in the Notice Period.
Hope, I have understood your question correctly. If not, you may kindly clarify, before I suggest anything. In your case, I do not wish to hazard an answer, unless I know what EXACTLY you are looking for.
Warm regards.
From India, Delhi
My response was for the the question, as asked by hrhaigreeva; "why basic is considered to be a variable linked to notice pay and the leave encashment?".
I think, the question you are asking now, is slightly different.
You are not asking - "WHY basic pay is considered" but "whether ONLY basic pay should be included or one can include 'guaranteed cash' in the Notice Period.
Hope, I have understood your question correctly. If not, you may kindly clarify, before I suggest anything. In your case, I do not wish to hazard an answer, unless I know what EXACTLY you are looking for.
Warm regards.
From India, Delhi
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