New labor laws: How your salary, work timings may change
The Union government is planning to implement new labor laws in India from July 1. The four codes pertaining to wages, health and working conditions, social security and occupational safety, and industrial relations have been notified after getting the President's approval. They will have an impact on salary, provident fund (PF) contribution, working hours, and leave eligibility of employees. Let us see how.
Why does this story matter?
The new labor codes have been created by subsuming 29 central laws. The parliament has passed them but since labor is a subject in the Concurrent List of the Constitution, the individual states will have to notify the rules under the new codes. So far, only 23 states and Union Territories have framed the rules under all four new labor codes.
Your office may switch to a 12-hour work shift
Once the new labor code becomes effective, companies can increase the work hours of employees to 12 hours, up from nine at present. However, firms with a 12-hour shift will have to provide three weekly offs i.e. a four-day work week. The new wage code mandates that employees cannot be forced to work for more than 48 hours per week.
Leave eligibility now stands at 180 working days
Earlier, the laws stated that employees have to work for at least 240 working days in a year in order to ask for leave. Now, it has been reduced by 60 to just 180 working days.
In-hand pay is likely to go down
Under the new wage code, the basic salary will be at least 50% of the gross monthly salary. This will allow for an increase in PF contribution made by employees as well as employers. Hence, the retirement corpus and gratuity amount will increase but the in-hand salary will take a hit. Those working in the private sector will be more affected by this.