No separate provision for VDA in respect of wages above minimum rates

Variable Dearness Allowance (VDA) was introduced in 1991 as a tool to safeguard wages against inflation by linking them to the cost of living index. VDA forms an important component while computing the minimum rates of wages.

If an employer is paying wages to workers which is equal to or higher than minimum wages (including VDA) as fixed by the State Government or provided under the Minimum Wages Act, 1948, then they are not required to pay VDA separately.  This has been apparently laid down by the Supreme Court in the case of Airfreight Ltd. vs. State of Karnataka (1999 LLR 1008 (SC).


Also Check: Other Legal Aspects