New Wage Code 2021: The wait for the people waiting for the New Wage Code 2021 can be long. According to sources, it will take some time to implement the new labor code. Actually, the inputs received from the states are yet to be discussed. It will be decided only after this discussion that from when the New Wage Code will be implemented. An important meeting is to be held in the Ministry of Labor regarding this on Friday. Sources reveal that the central government is in the process of finalizing the rules. The government is preparing to implement the New Wage Code in the current financial year itself.
If sources are to be believed, then the central government is ready to notify the New Wage Code. But, the inputs received from the states are yet to be discussed. The states were given time till September 2021. It was expected that the code would be implemented from 1 October 2021. But, now information is being received that it may be delayed. A meeting is to be held in the Labor Ministry on Friday. It will be clear only after this meeting that from when the new Wage Code 2021 will be applicable. Based on the suggestions, the code will be finalized and then it will be notified.
What will change with the new wage code?
- The limit of allowances under the new code will be 50%.
- Basic salary will be kept at half of the total salary.
- EPF contribution will be calculated from basic salary.
- PF contribution will increase due to increase in basic salary.
- Proposal to increase working hours to a maximum of 12 hours.
- Extra working overtime of 15-30 minutes.
- Not less than 30 minutes of overtime under the current rule.
- Half an hour break after every 5 hours to the employee.
- 3 days off in a week for 12 hours duty.
What is the New wage code?
The government has made 4 new codes by combining 29 central labor laws. These include the Industrial Relations Code, Code on Occupational Safety, Health and Working Conditions Code (OSH), Social Security Code and Code on Wages. But, the biggest change is in the definition of ‘wage’. It has been expanded. The new labor code is aimed at consolidation. 50% of the salary will be directly included in the wages. Let us tell you, new laws related to labor reforms have been passed by the Parliament. Now to implement them.
Salary structure will change
According to the New Wage Code Act 2019, the basic salary of an employee cannot be less than 50% of the cost of the company (CTC). At present, many companies reduce the basic salary and give more allowances from above so that the burden on the company is reduced. With the implementation of the New Wage Code, the salary structure of the employees will change completely. The ‘Take Home Salary’ of the employees will decrease, because by increasing the Basic Pay, the PF of the employees will be deducted more, that is, their future will be more secure.
There will also be a change in PF, Gratuity
Contribution to gratuity will also increase along with Provident Fund. Take home salary will definitely decrease but the employee will get more amount on retirement. The New Wage Code 2021 will also be applicable for the employees of the unorganized sector. The rules related to salary and bonus will change and there will be equality in the salary of employees working in every industry and sector.
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