Industry stakeholders in India agree on allowances cap

After a review of India’s salary structure, a new Wage Code that considers the ratio of allowances against salaries will be implemented.
By: | August 24, 2022

When implemented, allowances paid to employees cannot be allowed to exceed 50 percent of their salaries, and companies will be provided with a two-to-three-month window to implement the new rules.

The stakeholders have also asked the government to issue clear guidelines for exemptions for companies who are unable to meet this obligation. At the same time, the stakeholders said that the list of exemptions should not be open-ended. 

Apart from this, the stakeholders also requested the government to increase the gratuity provisions. Also, the stakeholders have also sought a two-month window starting from the notification date to implement the new guidelines.

Other issues like the participation of the women workforce also figured during the meeting. The government wants 50% the total workforce in India to consist of women and the Labour Ministry has also asked the industry to use e-shram portal database to create new jobs. 

READ: Indian employees look for job fulfilment

The industry stakeholders also submitted some recommendations related to EPFO (Employees’ Provident Fund Organisation) and ESIC (Employees’ State Insurance Corporation) to the government. They made a presentation on its preparedness for the implementation of the four labour laws in the meeting of the Ministry of Labour. 

The Ministry of Labour will now discuss the new laws with the states as part of the exercise to build consensus on new labour laws across the country, according to Zee Business.