Wages of daily rated employee will be calculated on the number of days worked without reference to the days in the month. The variable Dearness Allowance for daily rated employees is also calculated on the number of working days. At the same time, for monthly rated employees there will be a monthly salary and the daily average of the same for any purpose, say for deducting leave without pay, is calculated by dividing the monthly salary by 30 without reference to 31 or 28/29 (February). However, for calculating overtime wages, the daily average for the purpose of arriving at hourly rate is calculated by dividing monthly salary by 26 since it will be more beneficial to the employees.
Under the Payment of Gratuity Act, the average salary for finding out the gratuity is arrived at by dividing monthly salary by 26.
For determining the retrenchment compensation payable under the Industrial Disputes Act, the monthly salary is divided by 30 and not by 26.
Therefore, different Acts have given different treatment with regard to divisor. However, 31 and 28/29 are not commonly used.
Regards,
Madhu.T.K