The government is all set to implement the amended labour codes from July 1. Almost 23 states have filed their draft rules. Reportedly, it is said that these new rules aim at providing better social security to the workers.
These amended laws will have an impact on in-hand salaries, PF, gratuity, working hours and encashment of leaves. The Centre government has been working on a new wage code while designing the four labour codes.
The four labour codes include 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.
1. Reduced Take Home Salary
After the implementation of the new wage code, your salary will significantly be reduced. It is expected that the new take home salary will be at least 50 per cent of the gross monthly salary under the new wage code.
2. Reduced Work Week But Increase In Daily Working Hours
It is speculated that these amended rules will bring a four day work week. But working hours will remain the same as the employee will have to work 12 hours per day.
3. Increased PF Contributions And Gratuity
As the take home salary will be reduced to 50 percent of the gross salary, the employees and employer’s contribution in provident fund will witness an increase. The retirement corpus and gratuity benefits will increase.
4. Changes In Earned Leave Policy
Under the new wage rules, unused leaves can be encashed in the same year. Government employees are provided with 30 days per year and defense personnel are allowed 60 holidays a year.
Employees can cash up to 300 holidays on carry forward. However, the Labor union is demanding an increase in the number of holidays to 450 in new code. Currently, there are 240 to 300 holidays in different departments and these can only be encashed after 20 years of service.
5. Full And Final Settlement Within 2 Days
According to new law code, a company should pay full and final settlement and dues within two working days of an employees’ last working day following resignation, dismissal or removal from employment and services.
Usually, the companies pay the complete settlement of salary and dues after 45 days to 60 days from an employee’s last working day, and in some cases, it goes up to 90 days.
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