The new Labour Code that was incorporated into the existing labour law on November 21, 2025, requires that wages must now be 50% of the CTC (cost to company). This means if your basic pay was on the lower side and the allowances made up for more than 50% of the CTC, then your basic pay has to be bumped up to 50% of the CTC. However, the overall CTC for existing employees can’t be changed legally, so companies can only adjust the components to comply with the new law.

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The government announced in a press release on November 21, 2025 the uniform definition of wages. “Wages now include basic pay, dearness allowance, and retaining allowance; 50% of the total remuneration (or such percentage

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