Legal Tip of the Day
Once an employer suspends an employee, subsistence allowance will be payable. Subsistence allowance forms the terms of employment and closes as not contingent on actual work but during the pendency of an inquiry, even though the worker is not working, he receives the allowance. Subsistence allowance is, in fact, a nickname for "reduced wages or reduced salary."
Consequently, the subsistence allowance is part of wages under clause (vi) of Section 2 of the Payment of Wages Act. It does not amount to a deduction of wages; hence, the claim for a deduction of wages would not be maintainable under Section 15 of the Payment of Wages Act.
When an employee is suspended, his contract of service is not rescinded, and the relationship of employer and employee subsists. The suspension of an employee merely prohibits an employer from assigning any work to the employee during the disciplinary proceedings.
Regards,
Deepak Miglani
Advocate
President, Legal Point Foundation
For any queries:
deepakmiglani@hotmail.com
Phone No: 9958086337 (Delhi), 09215514435 (Haryana)
From India, Coimbatore
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746Once an employer suspends an employee, subsistence allowance will be payable. Subsistence allowance forms the terms of employment and closes as not contingent on actual work but during the pendency of an inquiry, even though the worker is not working, he receives the allowance. Subsistence allowance is, in fact, a nickname for "reduced wages or reduced salary."
Consequently, the subsistence allowance is part of wages under clause (vi) of Section 2 of the Payment of Wages Act. It does not amount to a deduction of wages; hence, the claim for a deduction of wages would not be maintainable under Section 15 of the Payment of Wages Act.
When an employee is suspended, his contract of service is not rescinded, and the relationship of employer and employee subsists. The suspension of an employee merely prohibits an employer from assigning any work to the employee during the disciplinary proceedings.
Regards,
Deepak Miglani
Advocate
President, Legal Point Foundation
For any queries:
deepakmiglani@hotmail.com
Phone No: 9958086337 (Delhi), 09215514435 (Haryana)
From India, Coimbatore
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sir, what is the % of wages has to be pay on suspension period and what about statutory deductions like esi,epf and pt. pls suggest.
From India, Bangalore
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From India, Bangalore
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Dear Sir Can you please guide whether PF & ESIC to be deducted on subsistance allowance paid to suspended employee Regards Sunil Nipurte
From India, Pune
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From India, Pune
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Rules for Statutory Deductions Exemptions Perquisites-Pay roll.doc
The karnataka payment of subsistence allowance Act, 1988.pdf