4-day work-week, reduced salary and more; All about India's new wage codes likely in 2022
Synopsis
The new wage law, once implemented, will have a significant influence on working hours, salary restructure, and PF contribution, to name a few.
The four labour regulations covering pay, social security, industrial relations, occupational safety, health, and working conditions are expected to be enacted by the following fiscal year, according to a senior official. The new wage law, once implemented, will have a significant influence on working hours, salary restructure, and PF contribution, to name a few. According to the official, at least 13 states have pre-published draught rules on these laws, and the Centre has finished the process of finalising the draught regulations on these codes in February 2021.
On August 8, 2019, the central government announced four labour codes: the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020, and the Occupational Safety, Health, and Working Conditions Code, 2020.
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According to the official, because labour is a concurrent topic, the Centre wants the states to adopt it all at once. The government's Code on Wages 2019 announcement may cut employees' take-home pay for the following fiscal year, i.e., April 2021, but components such as PF and Gratuity may increase. This is because the new pay law includes a clause requiring that the employee's basic income be at least 50% of their net monthly CTC. As a result, if this provision is implemented, employees will be unable to receive more than 50% of their net monthly compensation in the form of an allowance. This also implies that the employee's gratuity and PF payment would grow as a result.
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As a result, while employees' take-home pay may be lowered, the Gratuity and PF component may increase. Experts think that the new draught will have an influence on employees' working hours, with some media sources claiming that employees may be permitted a four-day workweek beginning next year, although they will have to work for 12 hours on those four days. The labour ministry appears to have said unequivocally that a 48-hour weekly work minimum is required.