HRA During Leave Without Pay


Need clarrification on House Rent Allowance deduction during leave without pay. Is it valid to deduct the HRA and transport allowance when on leave without pay? Does labour law support this deduction....


Interesting question.

Simple answer: Yes, the employer can withhold the entire wage including allowances during unpaid leave.

More complicated answer:  The labor law is silent on this.  While it specifies unpaid leave i.e. it can be taken as per certain circumstances; it doesn't give explicit guidance on what is to be paid and not paid.  This means that a company's internal policies (duly approved by MOL) cater to this.  Most companies do NOT pay anything during unpaid leave.

I know of cases filed by people using labor law.  They used a minor distinction in the wording i.e. salary vs. wage.  The labor law says unpaid leave without salary.  So they said that salary is basic salary and wages include allowances so that means we should get the allowances.  They lost the argument.

Thanks for prompt reply ....

New topic