The Government of Karnataka has deferred the payment of Variable Dearness Allowance (VDA) by employers, under the various notifications issued under the Minimum Wages Act. The government of Karnataka made this known by virtue of a notification dated 20th July 2020.
This deferment is in relation to the period of 1st April 2020 till 31st March 2021. The aim of the notification was to alleviate the adversity faced by employers who were required by the Central Government to pay wages to their employees including VDA for the lockdown period.
Under the various Minimum Wage notifications, a VDA of Rs. 417.60 per month is payable for the period from 1st April 2020 till 31st March 2021. Employers must pay this deferred VDA to their employees after 31st March 2021. This will be in addition to the VDA applicable from 1st April 2021 onwards.
If the employees choose not to pay the requisite VDA, they will also not be liable to pay Employees’ State Insurance (ESI) and Provident Fund (PF) contributions on the deferred VDA. However, ESI and PF will be payable when the deferred VDA is paid after 31st March 2021.
At the time of paying the deferred VDA, the employers will also have to pay the difference in ‘bonus’ and difference in ‘leave with wages’ as well as the difference in ‘overtime payment’.
Further, the notification clarifies that these provisions are also available for the VDA that is payable to contract labourers.
