Understanding Subsistence Allowance: Is It Paid During Employee Suspension?

What is subsistence allowance? Is it payable to an employee against whom suspension pending enquiry is running?

In HR terms, a subsistence allowance is an amount paid to an employee who is suspended pending an investigation or inquiry. This allowance is meant to cover basic living expenses during the suspension period. The payment of a subsistence allowance is typically a standard practice to provide some financial support to the employee while the investigation is ongoing. It is important for organizations to have clear policies and guidelines regarding the payment of subsistence allowances to ensure transparency and fairness in such situations.

Dear Palash,

According to Section 10A of the Industrial Employment (Standing Orders) Act, 1946, regarding Subsistence Allowance:

Where the workman is suspended pending investigation by the employer into complaints or charges of misconduct against him, the workman shall be paid subsistence allowance equal to 50% of wages for the first 90 days of suspension and 75% of wages for the remaining period until the completion of disciplinary proceedings.

Thank you.

Fully agree with you. There can be state legislations on Payment of Subsistence Allowance. For example, in Tamil Nadu, there is the Tamil Nadu Payment of Subsistence Allowance Act 1981, and in Kerala, the Payment of Subsistence Allowance Act 1973. Both Acts prescribe the payment of subsistence allowance at the rate of 100% after 180 days of suspension pending inquiry.

K C S Kutty, Chennai

According to Section 10A of the Industrial Employment (Standing Orders) Act, 1946:

Subsistence Allowance: Where the workman is suspended pending investigation by the employer into complaints or charges of misconduct against him, the workman shall be paid subsistence equal to 50% of wages for the first 90 days of suspension and 75% of wages for the remaining period until the completion of disciplinary proceedings.

Dear,

If the allowance is not paid and Management proceeds with the Enquiry, it is vitiated.

With Regards

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Dear Palash,

The subsistence allowance to be paid to the employee will vary from industry to industry and organization to organization.

Saritha

Vaibhav,

PF treatment will depend on the basic salary that he earns. It will be paid commensurate with the basic salary paid during the suspension period.

PF deduction is not mandatory during the period of suspension. However, if the employee desires to continue the deduction, it must be intimated to the employer in writing. Otherwise, any loans provided would continue to be deducted, and other taxes will also be deducted.

Thank you.

Please let me know if deductions will apply or not because I heard that it should be without deductions like ESI, EPF, PT.

Dear All,

The subsistence allowance shall be paid at 50% for the first 90 days, and thereafter at 75% of the total gross salary. Corresponding to the percentage of the gross salary, the basic salary would be adjusted, and consequently, the Provident Fund (PF) shall be calculated.

This allowance is provided during periods where any inquiry or disciplinary actions are pending.

Though there are specific rules and regulations for different states, most states adhere to the same set of rules.

Regards,
Naveen Jain