New Wage Rule to increase cost of Company & Reduce Take-Home Pay of Employees:

• As per new rule part of Code of Wages passed by the parliament which shall be made applicable effective from April 2021 (implementation has been postponed and not made applicable from 1-4-21), all the allowances will be caped to 50% Basic Wages (i.e. Basic + Dearness Allowance).
• Since PF, gratuity and other statutory deduction are payable both by the company and employees on component of basic salary, the pay-out of the Company in the form of statutory deductions will increase.
• This will require companies to re-look and revise the pay-structure since currently allowances and other emoluments part of the salary structure are quite higher than revised limit of 50% basis pay.                                                                                                  

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