I have two questions as an HR fresher studying labor laws:
Hello, everyone. I was reading about the EPF Scheme and have a question. How is the retention allowance calculated for PF? I've noticed that many organizations provide the retention allowance either annually or semi-annually. Does the contribution amount change for the specific month in which the retention allowance is given?
Regarding the Code on Social Security 2020, are HR professionals currently using this for labor laws, or is it yet to be implemented?
From India, Mumbai
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Hello, everyone. I was reading about the EPF Scheme and have a question. How is the retention allowance calculated for PF? I've noticed that many organizations provide the retention allowance either annually or semi-annually. Does the contribution amount change for the specific month in which the retention allowance is given?
Regarding the Code on Social Security 2020, are HR professionals currently using this for labor laws, or is it yet to be implemented?
From India, Mumbai
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If you mean 'retaining allowance', I would say that it is an amount payable every month because retaining allowance is an allowance paid to workers whose service is 'retained' by the employer when there is no work.
The situation is like this: when there is no work for any reason, the establishment may declare a layoff. But layoff (used as per the Industrial Disputes Act and not in the new generation HR concept wherein layoff means retrenchment and not temporary discontinuance due to non-availability of materials, etc.) may end in 45 days, but still the workers will not be given employment. In such a scenario, the workers will not be paid any wages. However, some workers will be retained by paying an amount called retaining allowance. This allowance is just like wages and it will qualify for PF also.
Retention amount that you have found in HR theories is an amount paid every year as an incentive for not leaving the company. That will not come under the scope of wages/salary at all.
The Social Security Code has not been implemented. Therefore, we are following the separate Acts for each situation only. After all, the new labor codes are modified versions of the existing Acts put into four BOOKS, and nothing else. Only a few changes are made, and that could have been possible even with an amendment to the existing Acts.
From India, Kannur
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4528The situation is like this: when there is no work for any reason, the establishment may declare a layoff. But layoff (used as per the Industrial Disputes Act and not in the new generation HR concept wherein layoff means retrenchment and not temporary discontinuance due to non-availability of materials, etc.) may end in 45 days, but still the workers will not be given employment. In such a scenario, the workers will not be paid any wages. However, some workers will be retained by paying an amount called retaining allowance. This allowance is just like wages and it will qualify for PF also.
Retention amount that you have found in HR theories is an amount paid every year as an incentive for not leaving the company. That will not come under the scope of wages/salary at all.
The Social Security Code has not been implemented. Therefore, we are following the separate Acts for each situation only. After all, the new labor codes are modified versions of the existing Acts put into four BOOKS, and nothing else. Only a few changes are made, and that could have been possible even with an amendment to the existing Acts.
From India, Kannur
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Well said by Madhu & Kumar.
Difference between Retaining Allowance and Retention Allowance
There is a difference between retaining allowance and retention allowance. Don't get confused about the component of retention allowance that your organization is paying.
Current Status of Labor Codes
Also, labor codes are not yet implemented; continue with the existing process only. There are high chances of implementation by next calendar year or financial year. Recently, we conducted webinars on the same and discussed in detail. If you need the recordings, I can share.
From India, Bangalore
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Difference between Retaining Allowance and Retention Allowance
There is a difference between retaining allowance and retention allowance. Don't get confused about the component of retention allowance that your organization is paying.
Current Status of Labor Codes
Also, labor codes are not yet implemented; continue with the existing process only. There are high chances of implementation by next calendar year or financial year. Recently, we conducted webinars on the same and discussed in detail. If you need the recordings, I can share.
From India, Bangalore
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EPF & Misc. Provision Act.1952 & the scheme.ppt
Epf EDLI Amdmt Scheme 2018.pdf
Amended Labor Laws.doc