HRA May Be Cut from Employees’ Salary Opting Work from Home

HRA May Be Cut from Employees’

The Labour Ministry may soon change salary structure of the employees who opt from work from home permanently.

This could result in a reduction in the house rent allowance (HRA) component of the employees and an increase in reimbursement cost under the infrastructure component. A top government official has told ET that the labour ministry may issue standing orders to redefine service conditions.

There is a need to redefine service conditions to ensure the employee compensation is structured taking into account the expenses incurred due to working from home, the official said.

Employees have to bear certain costs such as electricity and WiFi and these need to be part of the compensation structure. From an employer’s point of view, the lower cost of living for an employee due to relocating to his or her hometown, in some instances to tier-2 and tier-3 cities, needs to reflect in the compensation package.

In this regard, “The government is considering all the options and something concrete is likely to come soon,” the official added. However, Labour welfare fund is another issue, besides the applicability of state labour laws in such situations that needs to be clarified.

However, BC Prabhakar, chairman and advocate of BCP Associates and a labour law expert, feels legislation should be avoided as work from home is an evolving concept in india. “Let the market determine the wage structure depending on the demand and supply of labour in the Indian market,” he said, adding that the management and the employee should be allowed to negotiate the service conditions as any intervention by the government would defeat the very purpose of working from home.


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