New Rule Change In Take-Home Salary, Working Hours Delayed. Read Details

The new labour laws, which will bring significant changes to the take-home salary, contribution to PF (provident fund) and the work timings, including the hours and days of work in a week, have been passed through the parliament but have been delayed as Indian states are yet to notify these regulations.

While the centre had planned to implement these new labour laws from July 1, the laws have not come into effect as a few states have not yet framed the rules under all four labour codes.

The four new labour codes were formed by reviewing and combining the previous 29 Central labour laws, including pay, social security, labour relations, occupational safety, health, and working conditions.

Under the new wage code, the basic salary component needs to be 50 per cent of the total pay, which will reduce the take-home salary increase in the contribution to the Employees’ Provident Fund because that part is set as 12 per cent of the basic pay.

Under the new labour laws, the retirement corpus and gratuity amount will increase because of the increase in employees’ base-pay component of the total salary.

The code also says that companies can increase employees’ working hours to 12 hours a day from 8-9 hours currently but would need to give three weekly offs. 

So, the number of working days per week will be reduced to four, but the number of working hours per week will remain the same. According to the new wage regulation, a total of 48 hours is a must each week.

The modifications in the newly prescribed labour codes should have been effective from July 1. Still, only 23 states and union territories (UTs) have released the draft guidelines under the Code on Wages, according to a written response by Minister of State for Labour and Employment Rameshwar Teli when asked about the timing of the implementation in the Lok Sabha.

As per the constitution, matters about labour need to be notified by states for the laws framed and approved by the parliament to be implemented.