New Wages Code: The government has finalized the rules under the four labor codes, including the wage code. These four labor codes have already been notified after obtaining the assent of the President.
The Ministry of Labor and Employment has finalized the rules under the four labor codes. These four labor codes have already been notified after obtaining the assent of the President. The ministry has completed the consultation process on the draft rules of the four codes. The new wedge code is expected to come into force from April 1, 2021 next year. With the implementation of the new Wage Code, your take home salary will be reduced.
These rules are ready to be notified. States are doing their work to strengthen the rules under the four codes. The Parliament passed the wedge code in 2019, while the other three codes received approval from both houses in 2020. After creating these rules, the codes can now be notified to all four simultaneously.
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Salary will decrease, PF contribution will increase
The government passed the Code on Wage Bill, 2019 (Code on Wages Bill) in Parliament last year to increase the benefits of retiring employees. This includes labor laws such as the Minimum Wages Act, Wage Payment Act, Bonus Payment Act and Equal Remuneration Act.
According to the rules, the contribution of gratuity and provident fund should be at least 50 percent of the total salary of the employees. To follow this rule, employers will have to increase the basic salary of their employees by 50 percent. This would mean that in-hand pay of employees could be cut. However, after the implementation of this rule, private sector employees will get more benefits on retirement than before.
Highlights of the new labor code
>> If an employee works for more than 8 hours a day or more than 48 hours in a week, then he will get double the amount of overtime pay than normal salary.
>> In the draft new labor code, it is proposed to make the working hours of the employees up to 12 hours a day. Earlier this period was 9 hours and it also included one hour rest.
>> In the code named as Occupational Safety, Health and Working Conditions, the government has said that companies should be allowed to keep working hours for 12 hours in a day.
>> Not only this, the rules have also been fixed regarding the calculation of overtime. If an employee works for 15 to 30 minutes, then he will be counted as a full 30 minutes.
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