Dear Rohan ji,
Now we have to concern with the definition of Wages as defined in Code on Wages, 2019 even though the Code on Wages, 2019 is not enforced yet.
According to Section 2 (y) of the Code on Wages, 2019 the definition of Wages is given verbatim below for your ready reference and reading:
"wages" means all remuneration whether by way of salaries, allowances or otherwise, expressed in terms of money or capable of being so expressed which would, if the terms of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment, and includes,—
(i) basic pay;
(ii) dearness allowance; and
(iii) retaining allowance, if any,
but does not include––
(a) any bonus payable under any law for the time being in force, which does not form part of the remuneration payable under the terms of employment;
(b) the value of any house-accommodation, or of the supply of light, water, medical attendance or other amenity or of any service excluded from the computation of wages by a general or special order of the appropriate Government;
(c) any contribution paid by the employer to any pension or provident fund, and the interest which may have accrued thereon;
(d) any conveyance allowance or the value of any travelling concession;
(e) any sum paid to the employed person to defray special expenses entailed on him by the nature of his employment;
(f) house rent allowance;
(g) remuneration payable under any award or settlement between the parties or order of a court or Tribunal;
(h) any overtime allowance;
(i) any commission payable to the employee;
(j) any gratuity payable on the termination of employment;
(k) any retrenchment compensation or other retirement benefit payable to the employee or any ex gratia payment made to him on the termination of employment:
Provided that, for calculating the wages under this clause, if payments made by the employer to the employee under clauses (a) to (i) exceeds one-half, or such other per cent. as may be notified by the Central Government, of the all remuneration calculated under this clause, the amount which exceeds such one-half, or the per cent. so notified, shall be deemed as remuneration and shall be accordingly added in wages under this clause:
Provided further that for the purpose of equal wages to all genders and for the purpose of payment of wages, the emoluments specified in clauses (d), (f), (g) and (h) shall be taken for computation of wage.
Explanation.––Where an employee is given in lieu of the whole or part of the wages payable to him, any remuneration in kind by his employer, the value of such remuneration in kind which does not exceed fifteen per cent. of the total wages payable to him, shall be deemed to form part of the wages of such employee.
Answer to your questions:
Retaining allowance is very much included in Wages.
Special allowances are not included in Wages.
Please don't mix up the term special allowance, what is considered presently in Maharashtra as Dearness Allowance with the definition of Wages under the new Law.
From India, Mumbai
183Now we have to concern with the definition of Wages as defined in Code on Wages, 2019 even though the Code on Wages, 2019 is not enforced yet.
According to Section 2 (y) of the Code on Wages, 2019 the definition of Wages is given verbatim below for your ready reference and reading:
"wages" means all remuneration whether by way of salaries, allowances or otherwise, expressed in terms of money or capable of being so expressed which would, if the terms of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment, and includes,—
(i) basic pay;
(ii) dearness allowance; and
(iii) retaining allowance, if any,
but does not include––
(a) any bonus payable under any law for the time being in force, which does not form part of the remuneration payable under the terms of employment;
(b) the value of any house-accommodation, or of the supply of light, water, medical attendance or other amenity or of any service excluded from the computation of wages by a general or special order of the appropriate Government;
(c) any contribution paid by the employer to any pension or provident fund, and the interest which may have accrued thereon;
(d) any conveyance allowance or the value of any travelling concession;
(e) any sum paid to the employed person to defray special expenses entailed on him by the nature of his employment;
(f) house rent allowance;
(g) remuneration payable under any award or settlement between the parties or order of a court or Tribunal;
(h) any overtime allowance;
(i) any commission payable to the employee;
(j) any gratuity payable on the termination of employment;
(k) any retrenchment compensation or other retirement benefit payable to the employee or any ex gratia payment made to him on the termination of employment:
Provided that, for calculating the wages under this clause, if payments made by the employer to the employee under clauses (a) to (i) exceeds one-half, or such other per cent. as may be notified by the Central Government, of the all remuneration calculated under this clause, the amount which exceeds such one-half, or the per cent. so notified, shall be deemed as remuneration and shall be accordingly added in wages under this clause:
Provided further that for the purpose of equal wages to all genders and for the purpose of payment of wages, the emoluments specified in clauses (d), (f), (g) and (h) shall be taken for computation of wage.
Explanation.––Where an employee is given in lieu of the whole or part of the wages payable to him, any remuneration in kind by his employer, the value of such remuneration in kind which does not exceed fifteen per cent. of the total wages payable to him, shall be deemed to form part of the wages of such employee.
Answer to your questions:
Retaining allowance is very much included in Wages.
Special allowances are not included in Wages.
Please don't mix up the term special allowance, what is considered presently in Maharashtra as Dearness Allowance with the definition of Wages under the new Law.
From India, Mumbai
Dear Mr Akhil Bhartiya,
Reference the details given by you, a query.
In the para titled "Explanation" - 3rd line - Is it 15%? is to be 50%?
Further eg if a salary is structured as
Basic+DA 10000 +HRA 5000 + Other Allowances 5000 = Gross
Plus we pay OT for a month approx Rs.10,000.
1) Should the OT be paid at Gross or Basic+DA
2) As per code of wages - since HRA/Allowa/OT is more than 50% of Basic+DA ; will these then be accounted within Basic+DA/Wages?
Warm Regards,
Deena Jagasia
From India, Mumbai
Reference the details given by you, a query.
In the para titled "Explanation" - 3rd line - Is it 15%? is to be 50%?
Further eg if a salary is structured as
Basic+DA 10000 +HRA 5000 + Other Allowances 5000 = Gross
Plus we pay OT for a month approx Rs.10,000.
1) Should the OT be paid at Gross or Basic+DA
2) As per code of wages - since HRA/Allowa/OT is more than 50% of Basic+DA ; will these then be accounted within Basic+DA/Wages?
Warm Regards,
Deena Jagasia
From India, Mumbai
Dear Deena Jagasia ji,
Your quote:
"Explanation" - 3rd line - Is it 15%? is to be 50%?
My say:
It is 15%. This explanation is pertaining to remuneration in kind. If the remuneration in kind exceeds 15%, it will be deemed as wages.
Your quote:
Further eg if a salary is structured as
Basic+DA 10000 +HRA 5000 + Other Allowances 5000 = Gross
My say:
In this example of you-
salary is Rs. 10000. (I am not touching here the MW rate)
payment other than salary (as stated in clauses (a) to (i)) is Rs. 10000.
Payment other than salary exceeding one-half i.e. exceeding 5000 shall be treated as salary.
Your quote:
Plus we pay OT for a month approx Rs.10,000.
1) Should the OT be paid at Gross or Basic+DA
2) As per code of wages - since HRA/Allowa/OT is more than 50% of Basic+DA ; will these then be accounted within Basic+DA/Wages?
My say:
OT is included in item stated in clauses (a) to (i). You can not exceed (a) to (i) Rs. 5000. There is also a limit on overtime hours under the FA as well in Shop Act.
Overtime rate is twice the normal rate of wages. Please read the definition of wages.
I wanted to make your quotes bold / italic. But I do not know how to do it on this forum. Can anybody let me know this?
From India, Mumbai
Your quote:
"Explanation" - 3rd line - Is it 15%? is to be 50%?
My say:
It is 15%. This explanation is pertaining to remuneration in kind. If the remuneration in kind exceeds 15%, it will be deemed as wages.
Your quote:
Further eg if a salary is structured as
Basic+DA 10000 +HRA 5000 + Other Allowances 5000 = Gross
My say:
In this example of you-
salary is Rs. 10000. (I am not touching here the MW rate)
payment other than salary (as stated in clauses (a) to (i)) is Rs. 10000.
Payment other than salary exceeding one-half i.e. exceeding 5000 shall be treated as salary.
Your quote:
Plus we pay OT for a month approx Rs.10,000.
1) Should the OT be paid at Gross or Basic+DA
2) As per code of wages - since HRA/Allowa/OT is more than 50% of Basic+DA ; will these then be accounted within Basic+DA/Wages?
My say:
OT is included in item stated in clauses (a) to (i). You can not exceed (a) to (i) Rs. 5000. There is also a limit on overtime hours under the FA as well in Shop Act.
Overtime rate is twice the normal rate of wages. Please read the definition of wages.
I wanted to make your quotes bold / italic. But I do not know how to do it on this forum. Can anybody let me know this?
From India, Mumbai
All the three codes got assent by the President. PFA are the Gazetted Notifications dated 29.09.2020 for respective codes for your information.
Please note that, all the four codes including the Code on Wages are now the Law of our Country. However, detailed rules under these codes are yet to be published and thereafter these codes will have effective power by separate notifications.
From India, Mumbai
Please note that, all the four codes including the Code on Wages are now the Law of our Country. However, detailed rules under these codes are yet to be published and thereafter these codes will have effective power by separate notifications.
From India, Mumbai
What is the current status of the Codes, is it notified by the Central Government??
From India, Pune
From India, Pune
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PPT on 3 Labour Codes -(Passed by Parliament) Sep 2020.pdf
Labour Codes.jpg