Pay Fixation on 1.1.06 and on the date of increment

We have been receiving lot of queries on sixth pay commission new pay fixation from the GConnect users. The point of concern of all is whether we will get any monitory benefit in the form of arrears or in the form of fixation of higher pay as on Sept 2008 (even at the cost of loosing some of arrears benefits), if the Pay Fixation to be done on 1.1.2006 is deferred to date of old increment that falls during the year 2006. This scenario squarely applies to Employees who have got financial upgradation under ACP scheme between 1st Jan 2006 and 31st Aug 2008.

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As per Rule 5 of CCS (Revised Pay) Rules 2008, an employee may elect to continue to draw pay in the existing scale until the date on which he earns his next or any subsequent increment in the existing scale or until he vacates his post or ceases to draw pay in that scale.

As far as the method of new pay fixation is concerned, Rule 11 of CCS (Revised Pay) Rules 2008, provides that where a Government Employee continues to draw his pay in the existing scale and is brought over to the revised pay structure from a date later than 1st Jan 2006, his pay in the revised pay scale shall be fixed as follows.

New Pay in the Pay Band is fixed by adding Basic Pay applicable on the later date (viz., the date on which the employee opts for new pay fixation), and Dearness Pay and Dearness Allowance applicable based on the rates applicable as on 1.1.2006. In addition, Grade pay corresponding to pre- revised will be payable from the date of New Pay fixation.

Now, let us have a comparison between the New Pay fixation on 1.1.2006 and on the date of increment.

Pay Fixation on 1.1.2006	Pay fixation on the date of increment
New Pay is fixed by multiplying the basic pay on 1.1.2006 with 1.86.	New Pay is to be calculated based on the Old Basic Pay, Dearness Pay and Dearness Allowance based on the rates applicable as on 1.1.2006 received by the employee on the date of New pay Fixation. Till the New pay is fixed Old pay is continued to be paid. The effect is No arrears till the New Fixation.
Increment of 3% on every July if Revised pay is received for at least 6 months before the date of new increment. So, in the event of pay fixation on 1.1.2006, increment due on 1st July 2006 is automatically paid.	Because of restriction cluase in the new increment provisions (that minimum of 6 months in the new pay scale for receipt for 3% increment on July), by default the first increment on July 2006 is not payable. For earning the susequent increments after July 2006, again the 6 months rule is to be applied.

Based on this rule frame work, We have made illustrative New Pay Fixation for 12 employees who belong to different pre-revised scales and receive pre-revised increments in different months.

Employee Old Pay details			Fixation on 1.1.2006		Fixation on the date of increment
Emp	B.P on 1.1.2006	Increment month	Sept-08 Fixed Pay	Arrears	Sept-08 Fixed Pay	Arrears
X1	7500 (6500-200-10500) HRA 30%, TA – Rs.1600	Feb	30837	130607	30574	123382
X2		April	30837	133045	30574	116658
X3		June	30837	135483	30574	109934
X4		Aug	30837	137952	30574	103435
Y1	12000 (12000-375-S21) HRA 30%, TA – Rs.3200	Feb	51469	233308	51147	223416
Y2		April	51469	237876	51147	211384
Y3		June	51469	242444	51147	199352
Y4		Aug	51469	247073	51147	187669
Z1	5000 (4000-100-6000)HRA 30%, TA – Rs.600	Feb	19399	77071	19121	70667
Z2		April	19399	78289	19121	66705
Z3		June	19399	79507	19121	62743
Z4		Aug	19399	80742	19121	58935
Calculator relevant to this Calculation available in GConnect			Calculator for all pay Bands		Calculator for fixation on the date of increment

This study shows that employees who receive their pre-revised increment in the month of June and before get no benefit either in the arrears or in the new pay when new pay fixation is deferred to their respective increment month. However, when the increment month is after Junel i.e from July to Dec, those employees if they defer their pay fixation to the month of their respective increment month, get small benefit in their Gross pay as on Sept-2008 (to the tune of around 7% to 10% of their pre-revised pay as on 1.1.2006), after incurring some loss in the arrears receivable.

This is because when an employee misses the revised increment during July 2006 on account of deferred fixation, he loses 3% of revised pay which is at any point of time more than the pre-revised increment the employee gets when he continues to get old pay after 1.1.2006. This is why the new Pay Fixation from Feb-06 to June-06 based on Pre-revised Basic Pay, Dearness Pay and Dearness allowance (DA) in these months is lesser than the New Pay fixed on 1.1.2006. On the other hand, when the New Pay is fixed during July-2006 to Dec-2006, the additional Dearness allowance (DA) of 5% from July 2006 added in the pre-revised pay which is taken for calculating the New Pay fixation neutralizes the July increment amount of 3% lost by the employee due to deferred Pay Fixation.

Of course the inference made out of this study is not foolproof and may vary in certain situations. We invite discussions on such situations by the users in the form of comments to this article.

The option available for the employees who have been promoted or received their ACP after 1.1.2006 is slightly different as they could opt for New Pay Fixation on the date ACP/Promotion. Want to have an idea about fixation of new pay in the case of ACP / Promotion? Check this article in Gconnect