CODE OF WAGES 2019 - request to you all to correct the following Salary Structure

Dear All , My request to you all to correct the following Salary Structure, which I have made as per the new code of wages:

Basic + DA = 43,000
HRA = 12,750
CON.ALLO = 6012
MED.ALLO = 3400
LTA = 3400
SPL/ALL = 9422
GROSS SAL = 77984
EMPR PF = 5160
GRATUITY = 2068

CTC = 85212


EMPLOYEE COVERED UNDER BONUS/ESI ACT
BASIC + DA = 11380
HRA = 3300
CONV.ALL = 2200
LTA = 880
SPL/ALL = 2348
GROSS SAL = 20,108
EMPLR PF = 1,366
ESI = 151
GRATUITY = 547
BONUS = 583

CTC = 22,755

Dear Gopal Ji,

The definition is very clear what ever your total CTC may be, you have to look that your Basic will be 50% of CTC.

Post Covid 19, we can expect more states to come up with the draft bill I guess. Attend an online webinar cum Q&A on 24 June 2021 and may help those who are having more queries on Code on Wages.

Listen and collaborate with Mr. V. Muthu Manickam (Former Deputy Chief Labour Commissioner, Government of India) & Mrs. Aparna Surabhi CA (CFO, Caliber Technologies).

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Dear Arihant Sir

Thanks for your reply.
I am still confused that whether as per code of wages 2019, the Basic Salary should be 50% of Gross salary or 50% of CTC .

Presently our Monthly Salary components are: Basic + DA, HRA, CONV ALLOW, MED ALLOW,SPL/ALLOW, LTA = GROSS SALARY AND GROSS SALARY ,EMPLR PF, GRATUITY, =CTC

Request you to clarify the above

Dear Mr.Gopal,

Really appreciate the clear salary structure given above.

However, if it would have been a detail explanation would have been better.

We pay ex-gratia for senior management.

if you could give us the structure on CTC / gross would be advisable. Example 50% basic on gross / 30% HRA on basic / max limit for LTA/Medical in two parts .

Employee below 21k are covered under ESI

How about bonus?

Dear Sir,
Our sal.components are certain percentage of Gross Salary i.e. Basic + DA=40% , Hra=20%, conv.allow =10%,Med Allow = 5%,LTA=10%,SPL/ALLOW = 15%= GROSS SALARY.
CTC= GROSS SALARY,EMPLR PF 12% of basic, EMPLR ESI=3.25%n of gross ( wherever applicable), GRATUITY=4.81% of basic

Bonus is not included in our Gross salary components. It is paid once yearly.
Exgratia is not mandatory, so not included.

Further, pls clarify whether as per code of wages 2019, the Basic Salary should be 50% of Gross salary or 50% of CTC

Considering definition of wages as per wage code , Basic and DA neither 50% of monthly gross nor 50% of CTC. It should be 50% of all remuneration payable to any employee and expressed in terms of money whether paid daily, weekly,monthly, bi-monthly. quarterly,half yearly or yearly with exception gratuity though payable but not to be considered and Value of house accommodation, light, water, medical or any other amenity or any services though not payable and not expressed in terms of money, but to be considered for calculation purpose.

Therefore, in all above data, items like employer contribution to ESI, Gratuity, Premium to insurance etc. should not be considered for the calculation purpose.

S K Bandyopadhyay ( WB,Howrah)
CEO-USD HR Solutions

Though employer's contribution to ESIC is not taken for working out the 50%, employer's contribution to PF is included, right?

Quoting Mr. S K Bandyopadhya:

Considering definition of wages as per wage code , Basic and DA neither 50% of monthly gross nor 50% of CTC. It should be 50% of all remuneration payable to any employee and expressed in terms of money whether paid daily, weekly,monthly, bi-monthly. quarterly,half yearly or yearly with exception gratuity though payable but not to be considered and Value of house accommodation, light, water, medical or any other amenity or any services though not payable and not expressed in terms of money, but to be considered for calculation purpose.

Therefore, in all above data, items like employer contribution to ESI, Gratuity, Premium to insurance etc. should not be considered for the calculation purpose.

Definition of wages as per Wage Code is English words and sentences to explain one mathematical equation. I have already mentioned it has three different stages. In the 1st stage it is mentioned in the definition that wages must be PAYABLE to a person.

PF is payable to any employee after retirement, resignation, death etc. But ESI contribution is not payable to any employee instead certain services are available.Organizations contributing premium to Mediclaim Insurance, Canteen subsidy, Co's arranged car to bring employees from residence and back etc. etc. are not payable to employee and those are services/facility and part of CTC including ESI contribution but not as a part of wages.

Law makers are reasonably intelligent to frame the definition such that employer can not deprived employee at the same time the amount which is not payable to employee should not be considered as part of wages. Exceptional like Gratuity, Value of house accommodation etc.etc. are mentioned in definition as special items.

S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions
91 98310 81531