I understood several companies are including DA as component of salary breakup for workers and they are not including DA on their staffs salary breakup. Why is this difference between workers and staffs ? Is there any legal implications ? Is there any advantage for staff, workers and management ?
But in practice and conventionally, those who work for lesser amount of remuneration are treated as workers and who do mainly administrative work and are involved in supervising of job are treated as 'staff' members. A more advanced version of staff emerged with the IT boom is 'professionals'.
These are relative and will change from establishment to establishment. A Foreman, who is a staff as per above description, of a small scale organisation will be treated only as a workmen when he takes up employment in a large scale organisation. It changes from situations to situations also. It is a human nature that when the management takes disciplinary action against a manager, he inclines himself to workmen. When the economy started declining and IT sector started facing problems, much of the 'professionals' have now started thinking of any possibility of themselves been treated as 'workmen' under the Industrial Disputes Act or other Acts!
Regarding Dearness Allowance, since the DA is expected to reflect cost of living, there should not be any difference in treatment. Many companies pay DA to the workmen only because DA is a mandatory component of Minimum Wages applicable. Since supervisory and managerial staff members do not come within the purview of minimum wages, they are paid an all inclusive salary.
It is also possible to revise the salary as an interim measure to meet the increasing cost of living by increasing the DA point. That is, if the present VDA is Rs 2.50 per consumer price index above 400 points (under the old series) it can be revised as Rs 2.85/ Rs 3/ Rs 3.5 etc sothat every point of CPI over 400 will attract VDA at the rate of Rs 2.85/ 3/ 3.5 etc.
Similarly, if the Fixed DA is 85% of the Basic, there can be a revision of DA from 85% to 90% or 93% to revise the salary. These depend upon the management policy. But as per statute an establishment is suppose to follow the system of VDA which varies as per cost of living index.
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