India vs. US Salary System: In India, the Pay Commission plays a role in increasing the salaries of government employees. But today, we will learn how salaries increase in the United States.

India vs. US Salary System: The methods for increasing salaries for government employees in India and the United States differ significantly. India relies on a pay commission, while in the United States, the Personnel Management Office and federal law regulate salaries, dearness allowances, and job grades.

Pay Commission in India 

In India, the salaries of central government employees and pensioners are determined by the Pay Commission. This commission is formed every few years. Its role is to review existing salaries, allowances, and pensions and to formulate new salary structures.

It should be noted that the Pay Commission uses a fitment factor. This is a multiplier that measures the difference between the current pay structure and the proposed pay increase. For example, the Seventh Pay Commission set the fitment factor at 2.57. Now, suppose an employee's current salary is 10,000, and the fitment factor is 2.57. The basic salary would be 10,000 × 2.57 = 25,700. 

This simply means that government employees in India receive a salary increase only when a new Pay Commission is formed, which is done every 10 years. 

How do salaries increase in America?

Unlike India, the US does not have a commission-based system. Government salaries in the US are controlled by the Personnel Management Office, as well as federal law and departmental regulations. Employees in the US are divided into different grades and levels. Salaries depend on their work, skills, experience, and government rank. 

Federal laws and regulations 

The Labor Standards Act sets minimum wages and overtime regulations. The Department of Labor issues regulations raising the salary threshold for overtime. Presidents also influence salaries. For example, the Biden administration increased the minimum wage for government contract employees to $15 per hour, which included adjustments for inflation. 

Main differences between India and America 

In India, salary increases are determined by a pay commission and occur at longer intervals. However, in the US, salary changes are driven by inflation-linked pay increases, federal regulations, and performance reviews.