“Indian Staffing Federation has been actively supporting and promoting the drive to provide these choices and believes that this move would actually contribute to formal job creation and a formal job can change the life of a youth in ways that no amount of subsidy or more rights can,” Rituparna Chakraborty, president, Indian Staffing Federation said.

According to HR consultancy firm TeamLease, India has one of the highest ‘salary confiscation’ regimes in the world and giving employees the choice to decide how their salaries are paid is by far the most important reform.

Nearly 100 per cent of the net job creation over the last two decades has taken place in the informal sector and we have overall 90 per cent informal employment, TeamLease said, adding that by recognising and offering employees the right to choose their take home pay will increase the share of our formal labour force.

Currently, in a cost-to-company model, informal employees can take home their entire salary while employees in the organised sector “lose” a part of their earnings to schemes like PF, ESI, Professional Tax, Employees Pension Scheme, statutory bonus and gratuity, TeamLease said.

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