COVID-19 has not only challenged our daily lives but also had a lasting effect on many employees financial wellness. Also, New wage Rule all has created a lot of confusion and stress and impacted Employee financial wellness and mental health.
According to PwC’s 9th annual Employee Financial Wellness Survey | 2020 COVID-19 update 54% said that Financial or money matters caused most stress.
Beyond the vital financial decisions needed to overcome the immediate impact of COVID-19, employees may need support as they recover financially and continue to protect themselves from future financial issues. PWC team found actually 42% seek guidance only when there is an important financial decision.
Added to that, New wage rule may raise India Inc’s costs from April (Source : Economic times). After April 2021, there can be significant impact on :
- Salary slips
- Provident Fund (PF)
- Gratuity components
- Take-home pay
- Balance sheets of India Inc
All these are because of the government’s new compensation rules, which are part of the Code on Wages passed by Parliament last year.
This might be effective in the next financial year, the new definition of wages (that includes salaries of executives in the private sector) caps allowances at 50% of total compensation. That means basic pay (in government jobs, basic pay plus dearness allowance) will have to be 50% or more of total pay from April.
We at MonAmI along with our Financial Advisors are helping enterprises and their employees to manage their personal finance better.