In the payment of Dearness Allowance, is the Company liable to pay both Fixed DA and Variable DA?
From India, Madgaon
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From India, Madgaon
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Pl.tell us about your Co. and what pattern as emoluments are being followed hitherto.
From India, Bangalore
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1158From India, Bangalore
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Company is in the Hospitality Industry.
Payment of FDA and VDA is currently being made to confirmed (union) staff. We are about to enter into a fresh round of union negotiations, and I need clarification on whether it is compulsory to pay FDA if VDA is being revised every quarter and paid monthly.
From India, Madgaon
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Payment of FDA and VDA is currently being made to confirmed (union) staff. We are about to enter into a fresh round of union negotiations, and I need clarification on whether it is compulsory to pay FDA if VDA is being revised every quarter and paid monthly.
From India, Madgaon
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Dear HR@KG
Settlement is an agreement arrived between two parties after due discussions, negotiations and deliberations. However no settlement can override any statute , agreement or decree.
Neither VDA nor FDA is mandatory- it all depends on union’s’ demand- and your agreement on it. As you know the process involves several give and takes . So the answer is with you –there will not be any universal, readymade solution to this query.
Your management needs to decide best in interest of your company. Generally the agreement arrives on the amount (total benefit in cash) and later it is being distributed in different heads (components).
Shailesh Parikh
99 98 97 10 65
From India, Mumbai
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Settlement is an agreement arrived between two parties after due discussions, negotiations and deliberations. However no settlement can override any statute , agreement or decree.
Neither VDA nor FDA is mandatory- it all depends on union’s’ demand- and your agreement on it. As you know the process involves several give and takes . So the answer is with you –there will not be any universal, readymade solution to this query.
Your management needs to decide best in interest of your company. Generally the agreement arrives on the amount (total benefit in cash) and later it is being distributed in different heads (components).
Shailesh Parikh
99 98 97 10 65
From India, Mumbai
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Dear HR@KG,
As you know, various patterns of emoluments are being followed in countries. They include time-scale, consolidated, variable, government scales/emoluments, CTC, etc.
This type of FDA & VDA are results of pay scale/time scale-type pay structures in which the basic pays are fixed on time scale slabs, coupled with additional items in the form of DA. This BP & DA are periodically revised upwards or otherwise as the wages and other benefits are negotiated with involved unions (if any) or by following certain guidelines like government scales/structures. Basic pay always connotes a time-scale pattern by which an employee, typically a fresher, is appointed, fixing the minimum of the time scale, say for the first year, and which increases through annual or bi-annual increments. In addition, a certain amount of FDA/VDA is also paid, along with other allowances like HRA/CCA, conveyance, medical, uniform, daily allowance, project allowance, OT allowance, etc.
Now, coming to FDA/VDA where time scales for BP are followed, DA is normally paid. In such establishments, these are linked to fluctuations in the Wholesale or Consumer Price Indexes, formulas published by the Ministry of Labour, Government of India. By this method, with BP remaining the same for at least one year, FDA/VDA gets revised, usually upwards periodically, perhaps once a quarter or semi-annually. This is due to the rise in prices of certain select commodities. Of course, when prices fall, the DA components could see downward revisions as well. Don't worry, as such instances are rare.
Moving on to FDA, when following indexes for declaring revisions in DA, the same is segregated between FDA & VDA as directed. Thus, FDA is expected to remain constant for a few years and is merged with BP when the revision of BP is negotiated, either fully or partly, leaving FDA to restart at '0' and continue sharing according to some formula for VDA. This is totally dependent on the publication of indices by the Ministry of Labour. If you don't follow this basis, then there is no compulsion to have an FDA/VDA pattern.
Moreover, this pattern will work only on:
i. Time scale/slabs
ii. Depending on publications of Government of India/Ministry of Labour notifications
iii. When governed by wage settlement agreements applicable to different types of categories.
Whatever pattern you might follow, it all culminates in the sum of Gross salary. However, if you have been following this pattern for many years, it would be difficult to switch to a new one. If necessary, introduce a new pattern for new hires. This is because there is an element of periodic revision of VDA at least once every 3 months, serving as an automatic partial revision of salary that no one would want to sacrifice. Therefore, study the formula/mechanism of FDA/VDA from the websites of the Ministry of Labour. I remember this subject being discussed in this forum about 5-6 years ago. Use the 'Search' box to locate.
Please let me know if you have any further questions or need clarification.
Thank you.
From India, Bangalore
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As you know, various patterns of emoluments are being followed in countries. They include time-scale, consolidated, variable, government scales/emoluments, CTC, etc.
This type of FDA & VDA are results of pay scale/time scale-type pay structures in which the basic pays are fixed on time scale slabs, coupled with additional items in the form of DA. This BP & DA are periodically revised upwards or otherwise as the wages and other benefits are negotiated with involved unions (if any) or by following certain guidelines like government scales/structures. Basic pay always connotes a time-scale pattern by which an employee, typically a fresher, is appointed, fixing the minimum of the time scale, say for the first year, and which increases through annual or bi-annual increments. In addition, a certain amount of FDA/VDA is also paid, along with other allowances like HRA/CCA, conveyance, medical, uniform, daily allowance, project allowance, OT allowance, etc.
Now, coming to FDA/VDA where time scales for BP are followed, DA is normally paid. In such establishments, these are linked to fluctuations in the Wholesale or Consumer Price Indexes, formulas published by the Ministry of Labour, Government of India. By this method, with BP remaining the same for at least one year, FDA/VDA gets revised, usually upwards periodically, perhaps once a quarter or semi-annually. This is due to the rise in prices of certain select commodities. Of course, when prices fall, the DA components could see downward revisions as well. Don't worry, as such instances are rare.
Moving on to FDA, when following indexes for declaring revisions in DA, the same is segregated between FDA & VDA as directed. Thus, FDA is expected to remain constant for a few years and is merged with BP when the revision of BP is negotiated, either fully or partly, leaving FDA to restart at '0' and continue sharing according to some formula for VDA. This is totally dependent on the publication of indices by the Ministry of Labour. If you don't follow this basis, then there is no compulsion to have an FDA/VDA pattern.
Moreover, this pattern will work only on:
i. Time scale/slabs
ii. Depending on publications of Government of India/Ministry of Labour notifications
iii. When governed by wage settlement agreements applicable to different types of categories.
Whatever pattern you might follow, it all culminates in the sum of Gross salary. However, if you have been following this pattern for many years, it would be difficult to switch to a new one. If necessary, introduce a new pattern for new hires. This is because there is an element of periodic revision of VDA at least once every 3 months, serving as an automatic partial revision of salary that no one would want to sacrifice. Therefore, study the formula/mechanism of FDA/VDA from the websites of the Ministry of Labour. I remember this subject being discussed in this forum about 5-6 years ago. Use the 'Search' box to locate.
Please let me know if you have any further questions or need clarification.
Thank you.
From India, Bangalore
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Thank you Shailesh and Kumar for your responses and added clarity on the subject.
From India, Madgaon
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From India, Madgaon
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Dear HRKG,
Please see the recent notification of DA issued by the Delhi Govt./Central govt. applicable to units all over the country following FDA/VDA. (However, the Supreme Court stayed the notification through its order dated 31.10.18). This will help you to understand the concept a little more.
From India, Bangalore
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Please see the recent notification of DA issued by the Delhi Govt./Central govt. applicable to units all over the country following FDA/VDA. (However, the Supreme Court stayed the notification through its order dated 31.10.18). This will help you to understand the concept a little more.
From India, Bangalore
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Maharashtra DA,Special allowance July 14 to Dec 14 - Notification.pd f