Confused About DA Reduction in Job Offer: Can They Change It Without My Consent?

I got a job in one of the MNC companies. While issuing the offer letter, they mentioned one amount for DA, but when issuing the appointment letter, they reduced the DA amount. They have stated, "These pay, allowance, and other benefits may be varied in the sole discretion of the company, such variation being subject to the condition that pay, allowances, or other benefits shall not be varied to your disadvantage without your consent."

I have a little confusion in this regard. Please advise if they will not reduce the benefits or DA amount without my knowledge.

Please suggest.

Thank you.

Regards.

According to the provisions of the Payment of Wages Act 1936, we cannot reduce the Basic or the Dearness Allowance (DA) of any employee. Therefore, any other allowances relevant to the employer can be reduced. Please check your concern with HR before you accept any such lopsided salary structure.

Regards

Thank you for the suggestion. They have made the following changes in the appointment letter:

1. Reduced the amount for LTA to 1200/-
2. DA amount is 117/-
3. While issuing the offer letter, they mentioned AHRA 4862/- per month, but this amount was removed in the appointment letter.

When I asked their HR department, they said it was sent by mistake like that. Before issuing the appointment letter, their security personnel visited my native place for inspection. Now, they are requesting property details as well.

Please advise if I should provide all those details.

Your situation seems a bit finicky to me. I suspect that the employer wants to get something out of the course. I mean, any MNC has nothing to do with the property issues. Please talk to the concerned person in the company for a better understanding before it's too late, and you realize something not so good at the eleventh hour.

They have sent their security people for address confirmation. Now, I got an email stating:

"There are some errors in our offer letter, and the same was corrected in our appointment letter.

1) Your correct LTA is Rs. 18,000/- only. It was wrongly indicated in our offer letter.
2) The DA is variable DA and it will vary month to month based on the points.
3) You are eligible for Superannuation benefit covered under LIC Superannuation scheme. In case you want to opt out, the same will be given as Additional HRA (15% of your basic + DA)."

Clarification on DA and Superannuation Benefit

Please advise me about DA; they are saying it may vary month to month based on the points. Regarding the superannuation benefit - if I opt out, will they really give this benefit?

Please suggest. Awaiting your valuable reply.

Thanks

Hey Rajeshwari, you should go and talk to the HR person directly. DA won't vary every month. Go to HR and speak to him/her about your doubts. If you are confident enough, then accept your appointment.

Regards,
Sai

LTA is a monetary benefit/tax-saving benefit given to any employee to incur expenses when traveling. LTA is exempted from tax (nontaxable) as a reimbursement and allowance. For LTA allowance, proof of travel should be submitted; if not, the LTA would be taxable. LTA is not given as a specific amount, and it can vary from company to company.

Understanding DA and Other Salary Components

However, DA is a non-variable component. Variable components include allowances, incentives, and bonuses, etc. Basic, DA, Medical, etc., are fixed components in a salary. HRA depends on the percentage after deciding the basic pay.

Please speak with your employer and clarify things beforehand to avoid any discrepancies once you join them.

I would beg to differ with others. In my company, a central government undertaking, we have a variable dearness allowance which is revised every three months. So, it may differ. The House Rent Allowance is 30% of the basic pay. Are they going to pay you Leave Travel Allowance lump sum?

Regards,
S. Kumar