Subsistence Allowance on Suspension: 50 Percent Then 75 Percent

Suspension is not dismissal. A worker sent home while a misconduct inquiry runs is still on the rolls, and in the establishments the law reaches, the employer has to keep paying him a fixed share of his wages. The rate is set by statute, and so is the single condition that raises it.

That rule sits in section 38 of the Industrial Relations Code, 2020, Act No. 35 of 2020. The India Code text carries a footnote to section 1 sub-section 3 recording that the Code came into force on the 21st day of November, 2025, vide Notification No. S.O. 5320(E), dated 21st November, 2025, see Gazette of India, Extraordinary, Part II, sec. 3(ii). From that date, section 104 sub-section 1 also repealed the Trade Unions Act, 1926, the Industrial Employment (Standing Orders) Act, 1946 and the Industrial Disputes Act, 1947. Guidance still built on any of those three repealed Acts has been overtaken.

Before the money, though, four gates decide whether section 38 reaches you at all. They are worth settling first, because three of them turn a large share of suspended employees away.

The eighteen thousand rupee figure in the definition of worker is what the Code itself says. It is expressly open to being replaced by a Central Government notification, so treat it as a number to check rather than a number to assume.

Section 38 sub-section 3 fixes the amount, and it does it in two limbs.

• Limb a. At the rate of fifty per cent. of the wages which the worker was entitled to immediately preceding the date of such suspension, for the first ninety days of suspension.
• Limb b. At the rate of seventy-five per cent. of such wages for the remaining period of suspension, if the delay in the completion of disciplinary proceedings against such worker is not directly attributable to the conduct of such worker.

Three things follow from the exact wording, and all three are routinely got wrong.

1. The seventy-five per cent. rate is prospective. It applies to the remaining period. It does not reopen and top up the first ninety days.
2. The condition is written as a negative test on the delay, not on the charge. For this rate, it does not matter whether you are eventually found guilty. What matters is whether the delay is directly attributable to your conduct. Adjourning repeatedly, not attending, or refusing to receive documents is what the clause is aimed at.
3. The benchmark is the wages you were entitled to immediately preceding the date of suspension. A cut made after the suspension order does not lower the base.

Half your pay is not half your take-home. Section 2 sub-clause zq defines wages as all remuneration capable of being expressed in money and includes basic pay, dearness allowance and retaining allowance, if any, but does not include bonus payable under any law, house accommodation and similar amenities, employer contributions to pension or provident fund and interest on them, conveyance allowance, sums to defray special expenses, house rent allowance, remuneration under an award or settlement, overtime allowance, commission, gratuity, and retrenchment compensation or other retirement benefit or ex gratia on termination.

Then comes the proviso that decides many of these calculations. If the payments falling in sub-clauses a to i exceed one-half of all remuneration, or such other per cent. as may be notified by the Central Government, the amount exceeding that half shall be deemed to be remuneration and shall accordingly be added into wages.

There is also an Explanation to the definition: where remuneration is given in kind, its value, so far as it does not exceed fifteen per cent. of total wages payable, is deemed to form part of wages.

Section 38 sub-section 1 says that where a worker is suspended pending investigation or inquiry into complaints or charges of misconduct, such investigation or inquiry, or where there is an investigation followed by an inquiry, both, shall be completed ordinarily within a period of ninety days from the date of suspension.

The load-bearing word is ordinarily. Section 38 does not say the suspension lapses on day ninety-one. It does not say the charge falls away, and it does not say you are reinstated. What crossing ninety days does, on the face of the section, is move you from limb a to limb b of sub-section 3, and even that is conditional on the delay not being directly attributable to your conduct. Anyone telling you that an inquiry running past ninety days is automatically void is reading something into the section that is not there.

This is the structural point that changes how you fight the case. Section 38 sub-section 2 does not say the employer shall pay. It says the standing orders certified under section 30 sub-section 8, or modified under section 35, shall provide that the employer shall pay subsistence allowance at the rates in sub-section 3. The duty is delivered through a document.

• Under section 30 sub-section 1, the employer prepares draft standing orders based on the model standing orders and covering every matter in the First Schedule. Item 9 of that Schedule is suspension or dismissal for misconduct, and acts or omissions which constitute misconduct.
• Section 30 sub-section 6 clause a makes standing orders certifiable only if provision is made for every applicable First Schedule matter.
• Section 29 sub-section 1 requires the Central Government to make model standing orders. Section 29 sub-section 2 deems those model standing orders adopted in an establishment from the date the section becomes applicable until certified standing orders come into operation under section 33.
• Section 33 sub-section 2 requires the employer to maintain the text of the finally certified standing order in such language and manner, for the information of the concerned workers, as may be prescribed.
• Section 34 requires the certifying officer to keep a copy of all finally certified standing orders in a register, and to furnish a copy to any person applying for it on payment of the prescribed fee.
• Section 36 shuts the door on improvisation: no oral evidence having the effect of adding to, varying or contradicting a finally certified standing order is admissible in any court.

Two consequences worth holding on to. First, your first document is not section 38, it is the certified standing order for your establishment, and section 34 gives you a route to it that does not depend on your employer's goodwill. Second, if the establishment is still running on model standing orders deemed adopted under section 29 sub-section 2, the remedies below that are drafted around orders certified under section 30 sub-section 8 are on weaker textual ground. Whether the notified model standing orders carry a subsistence allowance clause is a document question, not an assumption. Get the document.

Start with the thing most guides never say. A private employer is not a public authority, so you cannot file an RTI application against your company. RTI is aimed at the labour machinery of the appropriate Government, which under section 2 sub-clause b is the Central Government for central public sector undertakings, railways, mines, major ports, banking, insurance, telecommunication and the like, and the State Government for everything else. That is where the standing orders, the exemption notifications and the complaint records live.

1. Grievance Redressal Committee, section 4. Every industrial establishment employing twenty or more workers shall have one or more Committees for resolution of disputes arising out of individual grievances. An aggrieved worker may apply within one year from the date the cause of action arises. The Committee may complete its proceedings within thirty days. Note the limit written into sub-section 8: a worker dissatisfied with the decision, or whose grievance is unresolved in thirty days, may within sixty days apply for conciliation to the conciliation officer through the Trade Union, of which he is a member. A worker who belongs to no union has a textual problem at that step. The direct-to-Tribunal route in sub-sections 10 and 11 is tied by sub-section 11 to a two year clock running from discharge, dismissal, retrenchment or termination, which does not describe a worker who is still merely suspended.
2. Section 37, interpretation of standing orders. If a question arises as to the application or interpretation of standing orders certified under section 30 sub-section 8, the employer, any worker or workers concerned, or the Trade Union, may apply to the Tribunal within whose territorial jurisdiction the establishment sits. The Tribunal decides after giving all parties a reasonable opportunity of being heard, and its decision is final and binding. Whether the standing order obliges payment, and at what rate, is exactly that kind of question.
3. Section 53, conciliation then adjudication. The conciliation officer holds proceedings, and must send his report within forty-five days of commencement. Where no settlement is reached, any concerned party may apply to the Tribunal within ninety days from the date the report is received. There is a hard outer wall: the proviso to sub-section 1 bars the conciliation officer from holding proceedings relating to an industrial dispute after two years from the date on which the dispute arose.
4. Section 59, recovery, but read the trigger. Sub-section 1 lets a worker apply to the appropriate Government to recover money due under a settlement or an award or under the provisions of Chapter IX or Chapter X, and on satisfaction the Government issues a certificate to the Collector, who recovers it as an arrear of land revenue, with a one year application limit that can be relaxed for sufficient cause. Subsistence allowance lives in Chapter IV, which is not in that list, so sub-section 1 does not reach a bare section 38 claim on its own. The route that does fit is sub-section 2, under which a question about the amount of money a worker is entitled to receive may be decided by the Tribunal specified by the appropriate Government within a period not exceeding three months, and sub-section 4, which sends the amount found due back into sub-section 1 for recovery. Sequence, not shortcut.
5. Section 86 sub-section 11, the penalty. An employer who does any act in contravention of the standing orders finally certified under the Code is punishable with a fine of not less than one lakh rupees, which may extend to two lakh rupees, and on a repeat under sub-section 12 not less than two lakh, up to four lakh, or imprisonment up to three months, or both. Whether a failure to pay is an act in contravention is for the deciding authority, not for you or your employer, to settle.
6. Section 85, who imposes that penalty. For penalties under section 86 sub-sections 3, 5, 7, 8, 9, 10, 11 and 20, the appropriate Government may appoint an officer not below the rank of Under Secretary to the Government of India, or of equivalent rank in the State Government, to hold an enquiry, summon witnesses and documents, and impose the penalty. Failure to pay it within ninety days attracts a further fine of not less than fifty thousand rupees.
7. Section 87 sub-section 1, the limit on you. No court shall take cognizance of any offence under the Code save on a complaint made by or under the authority of the appropriate Government. You cannot prosecute your employer yourself. That is precisely why the section 85 administrative route, and the paper trail you build by RTI, are the practical levers.
8. Section 94, who can speak for you. A worker party to a dispute may be represented by an office-bearer of a registered Trade Union of which he is a member, of a federation to which it is affiliated, or where he is in no union, of any Trade Union connected with the industry, or by another worker in that industry authorised as prescribed. Sub-section 3 is blunt: no party is entitled to be represented by a legal practitioner in conciliation proceedings or before the Tribunal or National Industrial Tribunal.

File it with the Labour Department of the appropriate Government, addressed to the office of the certifying officer or the Labour Commissioner for your area.

To,
The Public Information Officer,
Office of the Labour Commissioner / Certifying Officer under the
Industrial Relations Code, 2020,
[Department and full address] .

Subject: Information under Section 6(1) of the RTI Act, 2005 regarding certified
standing orders and subsistence allowance under Section 38 of the Industrial
Relations Code, 2020.

Sir/Madam,

Under Section 6(1) of the Right to Information Act, 2005, please provide:

1. A certified copy of the standing orders of [name and full address of the
   establishment] as finally certified, from the register maintained under
   Section 34, together with the date of certification and the certifying
   officer's order under Section 30(5). I am willing to pay the fee prescribed
   under Section 34.

2. A copy of the model standing orders made by the Central Government under
   Section 29(1), specifically the clause dealing with suspension pending
   inquiry and subsistence allowance.

3. Whether any notification under Section 39 exempting the said establishment,
   or the class of establishments to which it belongs, from all or any of the
   provisions of Chapter IV is in force, and if so a copy of that notification.

4. The name, designation and office address of the certifying officer, and of
   the appellate authority appointed under Section 32, for this area.

5. The name, designation and office address of the conciliation officer
   appointed under Section 43 having jurisdiction over the said establishment,
   and of the Tribunal constituted under Section 44.

6. The name, designation and office address of the officer, if any, appointed
   under Section 85(1) for holding enquiry and imposing penalty under Section
   86, sub-section 11.

7. The number of complaints received by this office in the last three financial
   years alleging non-payment of subsistence allowance to suspended workers, the
   number in which a complaint was made under Section 87(1), and the number in
   which a penalty was imposed under Section 85.

I enclose the prescribed application fee. If any part of this information is
held by another public authority, please transfer that part under Section 6(3)
within five days. Please supply the information within the thirty day period
fixed by Section 7(1).

Yours faithfully,
[Name]
[Full postal address]
[Date]

Points 1 and 3 decide the case. Point 1 puts the operative document in your hands without asking your employer for it, and point 3 tells you whether Chapter IV has been lifted from your establishment. Build the application with the AI RTI Drafter, set the thirty day clock with the Timeline Tracker, test a vague or partial reply with the PIO Reply Checker, and if the deadline passes in silence, move with the First Appeal Builder.

• Assuming every suspended worker is covered. Section 28 sub-section 1 sets the chapter's floor at three hundred workers, with a twelve month look-back.
• Calculating fifty per cent. of gross pay. Section 2 sub-clause zq excludes house rent allowance, conveyance, overtime, commission, bonus and provident fund contributions, then adds part of them back only if they cross one-half of all remuneration.
• Treating ninety days as a hard deadline. Section 38 sub-section 1 says ordinarily. The consequence written into the section is a change of rate, not the collapse of the inquiry.
• Expecting arrears on the first ninety days at the higher rate. Limb b applies to the remaining period.
• Delaying the inquiry to force the higher rate. Limb b is available only if the delay is not directly attributable to your conduct. Every adjournment you seek is on the record.
• Filing an RTI against the employer. A private company is not a public authority. Aim at the labour department that holds the standing orders and the notifications.
• Sitting on the file. Section 4 sub-section 5 gives one year from the cause of action, section 53 sub-section 1 bars conciliation after two years from the date the dispute arose, and section 59 sub-section 1 sets a one year window for a recovery application.
• Briefing counsel for the Tribunal. Section 94 sub-section 3 bars representation by a legal practitioner in conciliation and before the Tribunal.

Fifty per cent. of the wages the worker was entitled to immediately preceding the date of suspension, for the first ninety days, and seventy-five per cent. of those wages for the remaining period if the delay in completing the disciplinary proceedings is not directly attributable to the worker's conduct. Both rates are in section 38 sub-section 3 of the Industrial Relations Code, 2020.

No. Section 38 sits in Chapter IV, and section 28 sub-section 1 applies that chapter only to an industrial establishment employing three hundred or more workers, or which employed that many on any day of the preceding twelve months. Section 28 sub-section 2 further excludes workers governed by the Fundamental and Supplementary Rules, the Civil Services Classification, Control and Appeal Rules, the Indian Railway Establishment Code and similar service rules.

Section 38 sub-section 1 says the investigation or inquiry shall be completed ordinarily within ninety days from the date of suspension. It does not provide that the suspension lapses or the charge fails after that. The consequence the section itself attaches is the shift to the seventy-five per cent. rate under limb b, and that shift is conditional.

Under section 2 sub-clause zq, basic pay, dearness allowance and retaining allowance count. House rent allowance, conveyance allowance, overtime, commission, statutory bonus, employer provident fund and pension contributions, gratuity and retrenchment or retirement benefits do not. If the payments in sub-clauses a to i exceed one-half of all remuneration, the excess is deemed remuneration and added back into wages.

Section 39 allows the appropriate Government, by notification, to exempt any industrial establishment or class of industrial establishments, conditionally or unconditionally, from all or any of the provisions of Chapter IV. Whether such a notification covers your establishment is a question of fact you should put in an RTI application, not something to guess at.

Two ways. Section 33 sub-section 2 requires the employer to maintain the text of the finally certified standing order for the information of concerned workers in the prescribed manner. Independently, section 34 requires the certifying officer to keep all finally certified standing orders in a register and to furnish a copy to any person applying for it on payment of the prescribed fee.

Section 94 sub-section 3 says no party is entitled to be represented by a legal practitioner in any conciliation proceedings under the Code or before the Tribunal or National Industrial Tribunal. Section 94 sub-section 1 lets you be represented by a Trade Union office-bearer, or where you are in no union, by an office-bearer of a Trade Union connected with your industry or by another worker in it, authorised as prescribed.

Not directly. Section 87 sub-section 1 provides that no court shall take cognizance of an offence under the Code save on a complaint made by or under the authority of the appropriate Government. The practical route is section 85, under which an officer not below the rank of Under Secretary to the Government of India, or of equivalent rank in a State Government, may hold an enquiry and impose the section 86 sub-section 11 penalty of one lakh to two lakh rupees for acting in contravention of certified standing orders.

• The Industrial Relations Code, 2020, Act No. 35 of 2020, full text on India Code, text as on 2 April 2026: indiacode.gov.in
• Sections 1, 2 sub-clauses b, zq and zr, 4, 28, 29, 30, 33, 34, 36, 37, 38, 39, 53, 59, 85, 86, 87 and 94, and the First Schedule, all quoted above from that India Code text
• Section 104 sub-section 1 of the same Code, as substituted by Act 1 of 2026, section 2, with effect from 21 November 2025, for the repeal of the Trade Unions Act, 1926, the Industrial Employment Standing Orders Act, 1946 and the Industrial Disputes Act, 1947
• The commencement footnote to section 1 sub-section 3 in that India Code text, recording Notification No. S.O. 5320(E) dated 21 November 2025
• Right to Information Act, 2005, sections 6 and 7: full text on RTI Wiki

• The RTI Playbook, the full method from application to second appeal
• AI RTI Drafter to build the application above
• Timeline Tracker for the thirty day clock under section 7 sub-section 1
• PIO Reply Checker to test a partial or evasive reply
• First Appeal Builder if the department stays silent
• RTI Act, 2005, full text

Reviewed by Dr. Shrawan Kumar Pathak. Last verified against the India Code text of the Industrial Relations Code, 2020 on 31 August 2026.