Who said HRA has been removed from the Labour Codes?
What is HRA? HRA is nothing but an allowance paid to those employees who are asked to stay in a rented house in connection with the business. It is not an allowance available universally to all the employees of the organization, but it is an allowance paid only to those who reside in rented houses. Since this is an allowance paid to meet a particular expense, i.e., rent, it is excluded from the definition of wages.
Since Indian employers have the practice of finding out which allowances will not qualify for their contributions like Bonus, leave encashment, gratuity, PF, retrenchment compensation, etc., they made HRA a part of the remuneration. They did not take it as part of the salary for PF, Bonus, Gratuity, etc., but took it as part of the salary to deduct the salary for the days the employee remained on leave without pay!
The new labor Code was expected to remove these confusions, but the authorities who made the Codes made it more complicated. The answer to one question, i.e., if the salary for deciding loss of pay is gross salary, why should there be a different salary for payment of PF, Bonus, overtime wages, leave encashment, or gratuity, remains unanswered.
From India, Kannur
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4526What is HRA? HRA is nothing but an allowance paid to those employees who are asked to stay in a rented house in connection with the business. It is not an allowance available universally to all the employees of the organization, but it is an allowance paid only to those who reside in rented houses. Since this is an allowance paid to meet a particular expense, i.e., rent, it is excluded from the definition of wages.
Since Indian employers have the practice of finding out which allowances will not qualify for their contributions like Bonus, leave encashment, gratuity, PF, retrenchment compensation, etc., they made HRA a part of the remuneration. They did not take it as part of the salary for PF, Bonus, Gratuity, etc., but took it as part of the salary to deduct the salary for the days the employee remained on leave without pay!
The new labor Code was expected to remove these confusions, but the authorities who made the Codes made it more complicated. The answer to one question, i.e., if the salary for deciding loss of pay is gross salary, why should there be a different salary for payment of PF, Bonus, overtime wages, leave encashment, or gratuity, remains unanswered.
From India, Kannur
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