
New draft rules for India's labour codes aim to standardize wage and gratuity calculations. Previously, employers often minimized statutory contributions by allocating a small portion of compensation to basic pay and dearness allowance. The new rules mandate that most components of cost-to-company (CTC) will count towards remuneration, with a maximum 50% exemption for allowances. This is expected to increase employer contributions to provident fund and gratuity.
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