𝗟𝗼𝘄𝗲𝗿 𝘁𝗮𝗸𝗲-𝗵𝗼𝗺𝗲 𝗽𝗮𝘆 𝘁𝗼𝗱𝗮𝘆, 𝗳𝗼𝗿 𝗮 𝗹𝗮𝗿𝗴𝗲𝗿 𝗿𝗲𝘁𝗶𝗿𝗲𝗺𝗲𝗻𝘁 𝗰𝗼𝗿𝗽𝘂𝘀 𝘁𝗼𝗺𝗼 | Code on Wages

𝗟𝗼𝘄𝗲𝗿 𝘁𝗮𝗸𝗲-𝗵𝗼𝗺𝗲 𝗽𝗮𝘆 𝘁𝗼𝗱𝗮𝘆, 𝗳𝗼𝗿 𝗮 𝗹𝗮𝗿𝗴𝗲𝗿 𝗿𝗲𝘁𝗶𝗿𝗲𝗺𝗲𝗻𝘁 𝗰𝗼𝗿𝗽𝘂𝘀 𝘁𝗼𝗺𝗼𝗿𝗿𝗼𝘄.

The Parliament has approved the code of wages in 2019, to rationalize 44 central labour laws. As per the new wage code, allowances given to an employee should not exceed 50 per cent of the cost to company (CTC). So, the basic pay has to be 50 per cent or more of the CTC from April 2021.

Under the current dispensation, employers structure wages in such a way the employees get more money as allowances and less as basic wages. This ensures more take home salary and less contribution towards the social security schemes as contribution to the provident fund and gratuity is calculated as a percentage of the basic salary.