The Wage Code conundrum has really got companies racking their brains, as they have to be compliant with the provisions of the code, yet there seems to be too many considerations to make before taking a decision. From an employee’s perspective, organizations need to ensure a soft landing when it comes to new compensation structure without making a huge material difference in the take home salaries of their staff. From employer’s perspective, the contribution towards provident fund is also likely to increase as the PF would get calculated on the expanded definition of wages. Other big ticket components under analysis include retrospective increase in liabilities for defined benefit plan such as gratuity and leave encashment if organizations have a large employee base.
At Aon, our team of expert consultants is working with clients at every step to help them take an informed decision and ensure compliance with the various provisions of code on wages. We support clients in analysing their current compensation structures, generating multiple options along with the pros and cons of each of them and assessing the actuarial impact on the retirement benefits analysis. We also understand the level of change management that would be needed upon transitioning, and thus we also help clients in communicating and transitioning to a future ready state.
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