How salary, working hours, PF contribution could change under new labour code
PremiumHow salary, working hours, PF contribution could change under new labour code
From working hours to in-hand salary, several aspects concerning employment and work culture are expected to change if the new labour codes are implemented. The Ministry of Labour and Employment has finalised rules under the four labour codes paving the way for making reforms a reality by notifying those for implementation soon. The four broad codes on wages, industrial relations, social security and occupational safety, health and working conditions (OSH) have already been notified after getting the President's assent. But for implementing these four codes, the rules need to be notified.
Here’s how the new labour codes are likely to impact us
Working Hours
Ones the new labour code kicks in, regular work hours can become 12 hours in a day from 9 hours at present. If a company decides to opt for 12 hours shift, the working days would have to be capped at 4 days a week with 3 mandatory offs. In all, the week’s total working hours will remain unchanged at 48 hours..
Eligibility for leave
Previously the laws required to have worked for a minimum of 240 working days in a year to ask for leave. It has now been reduced to 180 working days
Four-day work week
Under the new labour laws, employers can allow their employees to work for four days a week instead of the traditional five-days a week. But employees who opt for a four-day work week will see a significant increase in work as they will now be working 12 hours daily.
Take-home salary will go down
The take-home salary will go down as the PF contributions of the employees and the employer will increase. Under the new codes, the provident fund contribution is required to be a proportion of 50 per cent of gross pay.
Parliament had passed four codes on four broad codes on wages, industrial relations, social security and occupational safety health & working conditions (OSH) which would ultimately rationalise 44 central labour laws.
The Code on Wages was passed by Parliament in 2019 while the three other codes got clearance from both the Houses in 2020.
The ministry wants to implement all four codes in one go. After firming up of rules, now four codes can be notified in one go.