7th Pay Commission: Centre Clarify Issues On Pay Fixation Exercise Option

From April 15, 2021, the central government has extended the three-month pay fixation deadline. After receiving a number of requests from different central government employee organizations, the centre released this clarification.

Though central government employees are busy calculating their salary increases following the restoration of Dearness Allowance (DA) from July 1, 2021, the government has announced another piece of good news (CGS).

However, according to the Department of Expenditure, a large number of references were obtained requesting forgiveness for the delay and another opportunity to exercise or pre-exercise the option for pay fixation because the employees had faced time constraints, among other things.

What is Pay Fixation?

Pay fixation refers to a change in pay made as a result of a raise, MACP, or pay increment or adjustment in accordance with a new pay commission. The fixation technique will be applied in accordance with the most recent amended pay rules provided by the Department of Labor from time to time.

The decision to allow salary fixation extensions would have a direct effect on the 7th pay commission pay matrix for central government employees.

"A large number of references have been received in this department seeking condonation of delay and allowing another opportunity to exercise/re-exercise the option of pay fixation as allowed under OM dated 28.11.2019 as the employees have faced time constraint, etc. in exercising their option of pay fixation thereunder," The Department of Expenditure at Ministry of Finance issued an Office Memorandum said in this regard.

The OM continued, "The problem has been investigated, and the said OM approves giving central government employees another opportunity to exercise/re-exercise their choice for pay fixation within three months of the date of the OM's issuance." On April 15th, 2021, the Om was released.

Employees are entitled to an annual increase on January 1 or July 1 depending on the date of appointment, promotion, or financial upgradation, according to Rule 10 of the CCS(RP) Rules, 2016. The government had previously clarified the date of the next increase for central government employees in 2019 under Rule 10 of the Central Civil Services (Revised Pay) Rules, 2016.

Fitment factor of the 7th Pay Commission

A central government employee's salary is divided into three sections, according to the rules of the Seventh Pay Commission: basic salary, benefits, and deductibles. A central government employee's net CTC is calculated by multiplying their basic salary by the 7th CPC fitment factor plus all allowances. Net pay, on the other hand, is the difference between Net CTC and deductibles such as PF contribution, gratuity, and so on.