LABOUR LAW CONSULTANTS MUMBAI, NAVI MUMBAI & THANE How wages is defined in Code on Wages, 2019? Section 2(y) "Wages" means all remuneration and includes (i) basic (ii) DA and (iii) retaining allowance but does not include (a) bonus (b) perquisites (c) employer contribution towards any pension or provident fund and interest thereon (d) conveyance /travelling allowance (e) defray special expenses (f) HRA (g) remuneration under any award or settlement (h) overtime (i) commission (j) gratuity (k) retrenchment compensation or retirement benefit. As per proviso to section 2(y) if the payment made to an employee under clauses (a) to (i) exceeds 50% of all remuneration payable as ‘wages’ under the Code, then the excess amount paid will be deemed as remuneration and considered as ‘wages'. Example – Salary payable per month to Mr. X is as under: (in Rupees) 1. Basic 10, 000 2. Dearness Allowance 5, 000 3. Bonus 1, 000 4. Employers’ contribution to PF 1, 800 5. Conveyance Allowance 6, 500 6. House Rent Allowance (HRA) 4, 500 7. Overtime Allowance 5, 000 Total 33, 800 Total Remuneration to Mr. X – Rs.33, 800 50 % of total remuneration – Rs.16, 900 The excluded portion of remuneration (from the definition of wages) i.e., Rs. 18800 exceeds 50% of total remuneration Rs.1900 will be added back to wages. [Rs.18, 800 – Rs.16, 900] Due to this revised definition of wages: A minimum wage would increase (earlier it was only basic plus DA, now it includes other allowances as well). refer proviso to section 2(y). Employers may have to pay to leave encashment, bonus, gratuity, etc. at a higher rate and thus burden on the employer will increase. Get in touch today! Corpmaxx Consultees Labour Law Consultant PF Consultants in Mumbai, Navi Mumbai and Thane | Tax Consultants in Mumbai, Navi Mumbai and Thane | ESIC Consultants in Mumbai, Navi Mumbai and Thane | Shop Establishment Consultants in Mumbai, Navi Mumbai and Thane | Labour Law Consultants in Mumbai, Navi Mumbai and Thane | Labour Licence Consultants in Mumbai, Navi Mumbai and Thane | Professional Tax Consultants in Mumbai, Navi Mumbai and Thane | Shop Act Registration in Mumbai, Navi Mumbai and Thane | Compliance Consultants in Mumbai, Navi Mumbai and Thane | Statutory Compliance Consultants in Mumbai, Navi Mumbai and Thane | MLWF Consultants in Mumbai, Navi Mumbai and Thane | Factory Licence Consultants in Mumbai, Navi Mumbai and Thane Service Areas: Parel, Dadar, Ghatkopar, Vikhroli, Kanjur Marg, Powai, Bhandup, Nahur, Mulund, Thane, Taloja, Wagle Estate, Bhiwandi, Dombivli, Kalyan, Ambernath, Badlapur, Atgaon, Lower Parel, Prabhadevi, Bandra, SantaCruz, Vile Parle, Andheri, Marol-Andheri, Sakinaka, Kandivali, Borivali, Vasai Road, Virar. Chembur, Vashi, Nerul, Belapur CBD, Kharghar, Panvel, Airoli, Rabale, Mahape, Turbhe, Virar, Palghar, Boisar. 31/08/2024