Understanding Subsistence Allowance: When and How Much Should You Pay During Suspension?

Hi Folks,

What is the criteria for payment of Subsistence Allowance? Normally, we pay 50% for the first 90 days, 75% up to 180 days, and full salary until the suspension is ended. My questions are:

1) What will be the minimum period required to pay the suspension allowance? For example, if we suspend an employee for one week, do we still need to pay suspension allowance to them?

2) If we suspend an employee for habitual late coming, frequent unauthorized leave, or any other reason, do we still need to pay the suspension allowance? Or is the suspension allowance only paid to employees suspended for mistakes of a grave nature?

Your views, please.

Dear Sudhakar,

Subsistence allowance is an allowance and it will not be taken into account in any part of the salary.

If an employee is issued a charge sheet or a show cause notice, he will automatically be under suspension pending inquiry (temporarily discharged from work). Until the inquiry comes to an end, we should provide subsistence allowance to the delinquent only through a money order.

Suspension can be given for the following reasons:
a) Misconduct
b) Misbehavior
c) Transgressing standing orders

Suppose you suspend an employee for habitual late coming, we can only give a salary cut, and we need not pay subsistence allowance.

I think this would be sufficient.

Regards,
V Sundarrajan

Suspension and Subsistence Allowance Guidelines

Minimum 1 day to a maximum of 4 days of suspension as punishment is permissible as per Standing Orders 1946. This should be done after conducting a legal and fair domestic inquiry. This suspension as punishment does not require the employee to be paid wages.

Subsistence allowance is payable when suspension pending inquiry is ordered. If an employee is placed under suspension pending inquiry, the rate of subsistence allowance is 50% of wages for the first 90 days of suspension, 75% of wages for the next 90 days, and 100% of wages for periods exceeding 180 days.

An employee can be suspended for habitual late coming, unauthorized absence, or grave mistakes for a maximum of 4 days. However, before taking such action, a legal and fair inquiry must be conducted.

Regards,
SDP

Subsistence Allowance During Suspension

Subsistence allowance is payable when suspension pending enquiry is ordered. If an employee is placed under suspension pending enquiry, the rate of subsistence allowance is as follows:
- 50% of wages for the first 90 days of suspension
- 75% of wages for the next 90 days
- 100% of wages for durations exceeding 180 days.

Deductions from Subsistence Allowance

Are ESIC and P.F. deducted from this allowance? Yes or no.

Regards,
Sarat Chandra Das

Do I need to issue a salary slip for a suspended employee?