Respected All,
We have joined a new organization. However, we have noticed that the Basic & DA for semi-skilled employees in Uttar Pradesh should be Rs 2964.00 & Rs 880.00 respectively, but the employer is providing Rs 3100.00 as Basic & Rs 2050.00 as DA, which exceeds the government standard.
Please guide me on how to manage this situation. Every six months (April & October), the government increases the DA. How should I handle the increase when the current amount is already higher than the standard?
After discussing with some individuals, I was advised not to increase the DA until it aligns with the government standard. Then, I can start increasing it every six months.
We are unable to modify the Basic & DA amounts and adjust the balance in other components as this has been the practice for the past year.
Regards,
Shekhar Srivastava
Sr. Executive - HR (General & Admin)
From India, Lucknow
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10We have joined a new organization. However, we have noticed that the Basic & DA for semi-skilled employees in Uttar Pradesh should be Rs 2964.00 & Rs 880.00 respectively, but the employer is providing Rs 3100.00 as Basic & Rs 2050.00 as DA, which exceeds the government standard.
Please guide me on how to manage this situation. Every six months (April & October), the government increases the DA. How should I handle the increase when the current amount is already higher than the standard?
After discussing with some individuals, I was advised not to increase the DA until it aligns with the government standard. Then, I can start increasing it every six months.
We are unable to modify the Basic & DA amounts and adjust the balance in other components as this has been the practice for the past year.
Regards,
Shekhar Srivastava
Sr. Executive - HR (General & Admin)
From India, Lucknow
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If you are paying more than min wages, what is the concern for you? Pls see the min wages in totality.
From India, Lucknow
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From India, Lucknow
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Dear Friend,
Please focus on minimum wages. Wages should not be less than the prescribed minimum basic wages set by the government, but that doesn't mean you cannot pay more than that. So, do not worry and pay whatever amount you choose, as long as it is not less than the minimum basic wages.
Regards,
Pankaj Chandan
From India, New delhi
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Please focus on minimum wages. Wages should not be less than the prescribed minimum basic wages set by the government, but that doesn't mean you cannot pay more than that. So, do not worry and pay whatever amount you choose, as long as it is not less than the minimum basic wages.
Regards,
Pankaj Chandan
From India, New delhi
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Dear,
You have to take legal and IR aspects into consideration. Legally, you are not required to pay any DA declared by the UP government every six months as you are already paying more than minimum wages. I understand your problem - there was no experienced person, and the bifurcation was done wrongly. If you want to increase the salary of your workers, do not increase DA; put it under another category like HRA or conveyance. Please take care of the IR part as well.
Regards,
JS Malik
From India, Delhi
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You have to take legal and IR aspects into consideration. Legally, you are not required to pay any DA declared by the UP government every six months as you are already paying more than minimum wages. I understand your problem - there was no experienced person, and the bifurcation was done wrongly. If you want to increase the salary of your workers, do not increase DA; put it under another category like HRA or conveyance. Please take care of the IR part as well.
Regards,
JS Malik
From India, Delhi
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I agree with Mr. Malik. However, I would like to add that there is no harm in paying more than minimum wages, as market rates in the local area may exceed State Government rates. If you adjust or allocate additional allowances, it should not lead to misunderstandings among workers due to a perceived decrease in wages. You should either wait until the Dearness Allowance (DA) aligns with the current level paid by the company, or if local market rates are already higher than State Government minimum wages, you should adhere to this system. Sometimes, local unions take the lead in setting wage agreements, which are then adopted by other industries in the area. Deviating from this mainstream approach could lead to industrial relations crises.
It's advisable to inquire about wage practices in similar industries nearby to understand prevailing standards and any existing agreements with employer associations. As a newcomer, it is essential to familiarize yourself with the history of the case to effectively advocate for amendments to the current system.
Regarding legal and industrial relations aspects, it's crucial to consider both perspectives. Legally, you are not obligated to adhere to the Dearness Allowance declared by the Uttar Pradesh government every six months if you are already paying above the minimum wages. If you intend to raise worker salaries, consider allocating additional funds under different heads such as House Rent Allowance (HRA) or conveyance allowance. Pay attention to the industrial relations component as well.
Kind regards,
Partho
From Saudi Arabia
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It's advisable to inquire about wage practices in similar industries nearby to understand prevailing standards and any existing agreements with employer associations. As a newcomer, it is essential to familiarize yourself with the history of the case to effectively advocate for amendments to the current system.
Regarding legal and industrial relations aspects, it's crucial to consider both perspectives. Legally, you are not obligated to adhere to the Dearness Allowance declared by the Uttar Pradesh government every six months if you are already paying above the minimum wages. If you intend to raise worker salaries, consider allocating additional funds under different heads such as House Rent Allowance (HRA) or conveyance allowance. Pay attention to the industrial relations component as well.
Kind regards,
Partho
From Saudi Arabia
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Moreover, you cannot revise the basic and DA now. As for PF contribution, the same cannot be less than what is given at present. So, just relax and do not worry, as what you are paying is already more.
As far as the basic is concerned, keep a check on that and increase accordingly so that it doesn't affect the minimum wages when it increases. DA, of course, is currently too high, so there's nothing to be worried about.
SK
From India, Delhi
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As far as the basic is concerned, keep a check on that and increase accordingly so that it doesn't affect the minimum wages when it increases. DA, of course, is currently too high, so there's nothing to be worried about.
SK
From India, Delhi
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Dear Shekhar,
It is rightly pointed out that since you pay more than the minimum wages, you need not worry about DA changes every six months. However, you should keep track of the changes, and only when the DA increases more than what you currently pay, it needs to be looked into.
It is the company's policy to determine the basic salary and the base. Someone has already set this, and you cannot reduce the basic as it affects PF and other factors. Employees will not accept it, and if your company is labor-oriented, it will cause you a lot of problems. It is very sensitive; please do not consider reducing the basic or DA now. Reducing the basic and DA will affect PF and Gratuity factors, which are retirement benefits.
During the time of increment, try to revise the salary structure within the law. You can provide HRA more than 5% of Basic, and you can also add medical or conveyance allowance, etc. Please study it thoroughly before implementing such changes. It should be a balanced act where neither the company nor the employees lose out. After all, we are also employees. Put yourself in that situation and ask yourself, "If your basic and DA are reduced, will you accept it, knowing that your PF savings will be less, etc.?"
If your company values its employees, you should be proactive and establish good people-oriented policies, as very few companies do that.
Regards,
Kamlesh Kanojia
From India, Mumbai
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It is rightly pointed out that since you pay more than the minimum wages, you need not worry about DA changes every six months. However, you should keep track of the changes, and only when the DA increases more than what you currently pay, it needs to be looked into.
It is the company's policy to determine the basic salary and the base. Someone has already set this, and you cannot reduce the basic as it affects PF and other factors. Employees will not accept it, and if your company is labor-oriented, it will cause you a lot of problems. It is very sensitive; please do not consider reducing the basic or DA now. Reducing the basic and DA will affect PF and Gratuity factors, which are retirement benefits.
During the time of increment, try to revise the salary structure within the law. You can provide HRA more than 5% of Basic, and you can also add medical or conveyance allowance, etc. Please study it thoroughly before implementing such changes. It should be a balanced act where neither the company nor the employees lose out. After all, we are also employees. Put yourself in that situation and ask yourself, "If your basic and DA are reduced, will you accept it, knowing that your PF savings will be less, etc.?"
If your company values its employees, you should be proactive and establish good people-oriented policies, as very few companies do that.
Regards,
Kamlesh Kanojia
From India, Mumbai
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If you are paying more than minimum wages than their is no point of giving DA. In April & October when Government declares the rise you adjust in HRA , Conveyance heads. Regards Abhijeet Sawant
From India, Ahmadabad
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From India, Ahmadabad
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If a person meets with an accident during the service hours and is recommended bed rest for 15 days , what type of leave is he eligible to?
From India, Delhi
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From India, Delhi
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As per government norms, DA changes every six months. So, if you want to apply the same policy, you can do so proportionately as per government norms. You can also adopt the same policy. Otherwise, if you want to increase the salary of employees, provide other benefits like HRA, Conveyance, and CCA.
From India, Chandrapur
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From India, Chandrapur
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Although the Basic+DA is higher than minimum wages presently, you cannot reduce it now since it has implications on PF contributions that cannot be lowered. Future increases may be distributed in HRA, other allowances, etc.
From India, Delhi
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From India, Delhi
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It is always preferable to maintain the Basic + DA as per the government declarations. It limits the statutory liability of the employer under various legislations like PF, Bonus, Gratuity, etc. If the employer has additional paying capacity, he can definitely include a break-up of salaries like HRA, Conveyance, etc. These allowances can be increased or decreased, but a basic and DA fixed at a higher level cannot be decreased.
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(Fact Checked)-The user's reply is [B]correct[/B]. It accurately highlights the importance of aligning Basic + DA with government standards and the flexibility to adjust other components of salary. (1 Acknowledge point)
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(Fact Checked)-The individual would be eligible for "Sick Leave" during the 15 days of recommended bed rest due to an accident during service hours. (1 Acknowledge point)