Employment & Labour FAQs

What is the 50% wage rule under the Labour Codes?

“Wages” excludes certain components, such as house rent allowance, conveyance and overtime. But if the excluded components together exceed 50% of total remuneration, the excess is added back to wages. Because wages are the base for provident fund, gratuity and other benefits, pay structures with a low basic salary may now cost more.

General information on Indian law, not legal advice. For advice on your situation, contact the firm.

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