Dear friends,
"Wages" is a comprehensive term including the entire package of compensation payable to an employee for the work done by him at the end of the predetermined wage period. Therefore, it would generally include the allowances given in the form of fringe benefits. Whenever the employer has the necessity to compensate the employee for any given period in lieu of his work or any work done by him in excess of his normal working hours, logically and legally, he has to pay the entire components of the actual wages minus only such components compensating the defrayal of the special expenses likely to be incurred by the concerned employee. Encashment of leave and payment for OT work, therefore, would require the same treatment. One may argue why then the difference in the definition of the same term in certain Enactments. It is only because of the nature of the benefit sought to be given under the Act rather than bringing in a uniform interpretation of the term. The exclusion would come in to play only in respect of the computation of that particular benefit and not in respect of all others. The actual practice, if any, contrary to the above legal position, in spite of its ubiquitousness, would not pass legal scrutiny.