Even after the government finalised the Terms of Reference (ToR) for the upcoming 8th Central Pay Commission, employee unions continue to keep their key demands at the forefront.
Among them, the proposal to increase the “family unit” size used for salary calculations from 3 to 5 members is gaining traction. Union representatives believe there is still room for discussion and are hopeful that the government may modify the ToR to incorporate their suggestions.
Drafting committee discussions keep hopes alive
The demand resurfaced strongly during the National Council (Staff Side)–JCM drafting committee meeting held on February 25. During the meeting, union representatives raised several issues related to the framework of the 8th Pay Commission, including the need to revise the family unit size used for determining minimum wages.
Employee unions argued that the current model does not reflect the economic realities faced by government employees today. According to union leaders, they will continue to push the proposal in upcoming consultations so that the commission takes a broader view of household expenses while recommending the new pay structure.
What is the family unit concept?
The calculation of minimum wages under past pay commissions has largely followed the Aykroyd Formula, which estimates the cost of living for a standard family unit based on food, clothing and housing requirements.
Under the 7th Pay Commission, the family unit was considered as three consumption units—typically representing a husband, wife and two children (with children counted as partial units).
However, employee unions are now demanding that the calculation should consider five units instead of three.
Why unions want the family size expanded
Unions say the existing formula no longer reflects the realities of Indian households.
One key argument is that many government employees financially support their elderly parents, but the current pay calculation does not recognise them as part of the family unit.
They also point to the Maintenance and Welfare of Parents and Senior Citizens Act, 2007, which legally obligates children to support their parents. According to unions, if this legal responsibility exists, the pay structure should also account for it.
In addition, employees argue that modern living costs—including internet access, education and healthcare—have significantly increased compared with the assumptions used in earlier pay commissions.
How a 5-unit formula could change salaries
If the family unit size increases from 3 to 5, the base calculation used for determining minimum wages would rise sharply.
The ratio of 5 units to 3 units equals about 1.67, implying a 66% increase in the foundational wage calculation even before applying other adjustments like the fitment factor.
Employee unions are also seeking a fitment factor between 3.00 and 3.25, compared with 2.57 used in the 7th Pay Commission.
Possible impact on minimum pay and increments
Based on various projections discussed by employee representatives and experts, the proposed change could significantly raise the salary base.
If the new formula is accepted, the minimum basic pay—currently ₹18,000—could theoretically move to around Rs 51,000–Rs 54,000. Annual increments, which are currently 3%, could also rise to 5–7%, according to some projections.
Since pensions are linked to basic pay, any upward revision would also benefit millions of retirees.
What happens next
The government approved the 8th Pay Commission in January 2025, and it is expected to come into effect from January 1, 2026. Traditionally, pay commissions are given around 18 months to submit their report, meaning consultations and discussions with stakeholders will continue over the coming months.
For now, employee unions are continuing their push for changes in the framework itself—hoping that the demand for a 5-member family unit could still find a place in the commission’s final recommendations.