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CS Executive · Setting Up of Business, Industrial and Labour Laws · The Code on Wages, 2019

Meera, an employee of Kaveri Engineering Ltd, Pune, earns Rs 40,000 wages in a wage period. Authorised deductions for income-tax, provident fund and a recoverable advance together total Rs 26,000. Under the Code on Wages, 2019, what is the position?

Only Rs 20,000 can be deducted in that wage period, because total authorised deductions cannot exceed fifty per cent of wages. The remaining Rs 6,000 is not lost to the employer; it may be recovered in the manner prescribed under the Code.

  1. AAll Rs 26,000 can be deducted in that wage period
  2. BOnly Rs 20,000 can be deducted in that wage period; the excess may be recovered in the prescribed mannerCorrect
  3. COnly Rs 13,000 can be deducted, being one-third of wages
  4. DNothing can be deducted as the total exceeds Rs 25,000

Explanation

Total deductions in a wage period cannot exceed 50% of wages, i.e. Rs 20,000 of Rs 40,000. The excess Rs 6,000 may be recovered in such manner as is prescribed. Deducting the full Rs 26,000 ignores the 50% ceiling.

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