When the labour codes took effect in late 2025, about 1,100 of our employees had pay structures in which allowances made up more than half of total remuneration. Allowances had been easy to add at hiring and promotion. Under the codes' wider definition of wages, the excess is counted back into wages, which raises provident fund contributions and gratuity. Our actuarial adviser estimated a one-time increase of ₹9.2 crore in the gratuity provision and a recurring employer cost of about ₹5.6 crore a year.
The CFO proposed rebalancing every salary within the same cost to company. That was lawful and cost-neutral but would have reduced monthly take-home pay for most of the people affected, by about ₹1,900 on average and by proportionately more at the lower grades. The fund's nominee director supported the CFO: the investor was preparing its exit, and recurring cost mattered.
I proposed a line instead. For the 940 employees earning under ₹60,000 a month, the company would absorb the additional employer contributions so that take-home pay did not fall, at ₹3.9 crore a year. Above the line, structures would be rebalanced within existing cost, and each person would receive an individual letter showing the effect on take-home pay and retirement savings. To fund the protection, the April 2026 increment pool would fall from 8 per cent to 6.5 per cent. The board accepted it at a second meeting.
Eleven employees raised formal grievances, mostly from above the line, and four structures were corrected on review. Voluntary attrition for the year ended March 2026 was 17.8 per cent, against 18.4 per cent the year before, although I would not credit the pay decision alone. Senior producers felt the smaller increment most, and two left saying so.
Pay design is now checked against the wage definition every year rather than only at hiring. What I would do differently is start sooner. Parliament had passed the codes years earlier, and I treated their commencement as a distant event until it was close.