Dear Sir,

My question is, if last month wages for any employee is "X" and as per CPI index last quarter VDA amount is "Y" than the salary for that month will X+Y but my question is from next month his fixed salary will become X+Y or it will be X only?

For clarification: i want to understand is VDA amount will be addon in main wages after every VDA payment or only need to pay VDA quarterly apart from fixed salary.


From India, Ahmedabad
Labour Law & Hr Consultant


Dear Prakash,

VDA is one of the components of the wage/salary structure of an employee either fixed under the Minimum Wages Act,1948 or under the contract of employment as the case be. Its calculation and effective method of payment in terms of periodicity shall be as already fixed.

Therefore, it shall be added to the existing head of VDA whenever the periodical rise occurs. In other words, if the existing monthly gross salary is 'x' and the rise in the VDA, whether quarterly, half yearly or annually, is 'y', then the revised gross salary from the effective date of rise should be ' x+y ' only and not otherwise since VDA is accumulative in nature.

From India, Salem

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