New Labour Codes: From working hours to take-home salary, what will change from July 1 in India?

New Labour Codes India: The new labour codes which will be introduced in India may bring down the number of working hours in a week, however, the daily working hours may increase. Under the new labour codes, the in-hand salary of the employees can also undergo a significant change as the Central Government is in the process of implementing the new laws from July 1.

A set of 4 New Labour codes in India will be introduced by the Central Government and reportedly, they will come into effect from July 1, 2022. The rules under the Four Labour Codes have been finalized by the Ministry of Labour and Employment. The four broad rules of new labour code that are on wages, industrial relations, social security and occupational safety, health and working conditions have already been notified after getting the President’s assent.

Notably, few of the states have not framed the rules under all 4 Labour codes yet and only 23 states and the UTs have released the draft rules under the Code of Wages, informed by the Minister of State for Labour and Employment Rameshwar Teli in a written reply to Lok Sabha.

𝗛𝗶𝘀𝘁𝗼𝗿𝗶𝗰 𝗿𝗲𝗳𝗼𝗿𝗺𝘀 𝗶𝗻 𝗹𝗮𝗯𝗼𝘂𝗿 𝗟𝗮𝘄

✅29 labour laws now amalgamated into 4 labour codes

☑️Wages security, social security and health security ensured for 50 crore workers

#7YearsOfSeva pic.twitter.com/QtgCcewojC

— PIB India (@PIB_India) May 30, 2021

New Labour Codes India: What will change from July 1?

1. 4-day work week

The employees favouring for less number of working days in a week, it will be good news for them. Under the new labour codes in India, employers can allow their employees to work for four days a week instead of the traditional five days of the week. However, the employees who will opt for a four-day work week will see an increase in work as their working hours will increase to 12 hours.

2. Working Hours

Once the new labour codes in India kick in, the regular working 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 will have to be capped at 4 days a week with 3 mandatory offs. This means that the week’s total working hours will remain unchanged at 48 hours.

3. Eligibility for leave

Earlier, the law 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.

4. Take Home Salary will go down

The take-home salary of the employees will go down as the PF contributions of the employees and employers will increase. Under the new Labour Codes, the Provident Fund contribution is required to be a proportion of 50 per cent of gross pay.

5. With the implementation of new wage Code, there could be major changes in Earned Leave Policy

The biggest change can be seen in Earned Leave Policy. The Labour Union has been demanding to increase the number of holidays to 450 in the new code. At present, there are 240 to 300 holidays in different departments.

4 Labour Codes: What do we know?

The Parliament of India had passed the four labour codes on four broad codes on industrial relations, wages, social security and occupational safety health, and working conditions which will ultimately rationalize the 44 central labour laws.

The Code on Wages was passed by the Parliament in 2019 while the three other codes got clearance from both the Houses in 2020. The Minister of Labour and Employment wants to implement all the four codes in one go. After the firming of the rules, now four codes can be notified in one go.