Why Do Some Companies Exclude DA from Salary Structures? Seeking Insights

Hi all, I am working in a private limited company. In my company, we do not show DA in the salary structure. However, we pay DA for On Duty as per our company policy. So, my question is: what benefit will the employer get if DA is not included in the salary structure? Hope you all understand my query.

Importance of Showing DA in the Salary Structure

It is better to show DA in the salary structure. If, for instance, an employee raises an industrial dispute stating, "As per the Minimum Wages Act, Basic and DA should be paid. But the Company is paying only Basic and not paying DA," it will become a violation of the law. You will be forced to pay an extra amount as DA with interest.

If you show DA separately, you will have the benefit of paying gratuity to an employee only on basic pay. Therefore, it is advisable to divide and show the existing Basic into Basic and DA in separate columns. Make sure that this amount complies with the minimum wages ceiling limit.

Clarification on Minimum Wages and DA

Minimum wages do not specify that DA has to be paid; it only states that Basic + DA should be above a specified amount. Therefore, an employee cannot raise an industrial dispute on this ground.

I suspect you are mixing up two completely different things that have the same abbreviation. One is Dearness Allowance, and the other is Daily Allowance. They are not the same, not even close, and are for completely different purposes. Please clarify what exactly your question is.