The 8th Central Pay Commission is gearing up to submit its recommendations on revisions in salaries, allowances and retirement structures of government employees to the Centre.
In this regard, the CPC is touring the country, holding consultations with various stakeholders, and urging memorandums or suggestions from central government personnel on its website.
One aspect that employee unions and stakeholders have spoken about is the onboarding factor, which plays a key role in the basic salary review. Most organizations required a setting factor of 3 to 5.
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What is a setting factor?
Simply put, the setting factor is a multiplier used by the Government of India to review the basic pay and pension of central employees when setting up a new pay commission.
When establishing a new pay commission, the government does not set a new salary distinctly for each job role. It takes their current base wage and multiplies it by a standardized factor, which is known as the setting factor.
For example, in the last (seventh) payment commission, the government set a suitability factor of 2.57, after taking into account aspects such as inflation and cost of living. To put this into practice, let’s take a government employee who earns a basic wage of $10,000 under the sixth payment commission. The revised base salary under the 7th Pay Commission will be the original base salary multiplied by the setup factor. Therefore, their basic pay under the 7th Pay Commission may reach this level $25,700 (10,000 x 2.57).
Read also | 7th Pay Commission: 87% of PU affiliated colleges fail to raise salaries of teachers even after 3 years
Onboarding Factor Under 8th CPC: What Do Experts Say?
Employee unions and organizations have demanded a suitability factor of 3 to 5 under the eighth pay commission, according to a Live Hindustan report.
However, experts on the matter pointed out that such a huge increase is unlikely, given that a difference of even 0.1% translates into billions of rupees in the government’s budget. According to a report by Live Hindustan, experts expect the setting factor to be 2.64. If this is implemented, employees who receive the original basic salary from $20,000 will now see it exceeding even more $50,000.
Experts further said that even if the setup factor was lower than what government employees demanded, it would still represent an effective 15 to 25 percent increase in their basic salaries.
The 8th Pay Commission was given 18 months to submit its report. At the same time, the Commission also extended the deadline for submission of memorandums and suggestions until June 15, 2026.
