India would most likely implement the new labour code or the new wage code- social security, industrial relations and occupation safety, health and working conditions by Financial Year 2023. Check in the article below what the new labour code on wages is, how will it affect your PF or gratuity, salary and working conditions etc. This may also affect your take-home salary as cited by many experts, so read the article carefully.
The Central Government has finalised the rules under these codes. It’s now just that the states are required to frame regulations on their part as labour is a concurrent subject.
Also as per the Union Labour Minister Bhupender Yadav, "the Occupational Safety, Health and Working Conditions Code is the only code on which the least number of 13 states have pre-published the draft rules." He made the statement in a reply in the Rajya Sabha. The highest number of drafts are pre-published in the code of wages of 24 states and union territories. 20 states follow the industrial relations code and the code on social security is followed by 18 states. While a few states have already published the laws, the Government of the day is asking other states to do it as well.
New Wage Code: What Would Happen?
Less Working Days:
In case the new wage code is applied, the employees may have to work just 4 days a week and get 3 days off. This however would be possible only with 12 hours a day as the Labour Ministry has made it clear that no compromise would be done on the number of hours.
The 48 hours a week duration has to be met.
Less Take Home Salary- More PF contribution:
There would also be less take-home salary and more PF for the workers. The new laws would change the way the basic pay is calculated and also the provident fund. The contribution of the employees in their PF would increase every month and the in-hand salary would reduce.
This restriction would be 50% of the allowances which means half of the salary would be basic wages and contribution to the provident fund is to be calculated as a part per cent of the basic pay and DA.
You can imagine if your salary is 1 lakh per month then the basic would be 50,000 and the PF contribution would be 50,000. However, if this salary increases, the contribution to PF would also increase thereby, effectively decreasing your salary than the increment amount that should have been.
Various new feeds have been coming up through the media houses regarding this subject. There has been a buzz on things like the limit of earned leave to be increased from 240 days to 300 days, or the eligibility of the Employees' Provident Fund Scheme to be increased from Rs 15,000 to Rs 25,000 or to Rs 21,000 like the Employees' State Insurance Scheme.
As per the current Wage Code, the basic salary of an employee cannot be less than 50% of the cost to the company but the companies decrease the basic salary and increase the benefits to avoid the cost to the company.
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