Central Government Intends New Labour Laws From July 1
The Central Government intends to implement new labour laws from July 1, 2022, which will affect the salary structure, PF contribution, working hours, and earned leave encashment.
So far, 23 states have framed the labour code rules passed by the parliament in February 2021.
Listed below are the changes that would be implemented after the new labour law comes into force:
1. The companies would be allowed to change the office working hours by increasing it to 12 hours from current 8-9 hours. But to compensate for the extra working hours, the companies would require to allot the employees three weekly offs.
2. Across industries, the maximum amount of overtime hours for workers has been increased from 50 to 125 hours every quarter.
3. The take-home wage component and the employer's contribution to the provident fund will both change significantly. The employee's basic wage might be reduced to 50% of the gross income under the new regulations. It will raise both the employee's and the employer's PF contributions. Some employees, particularly those in the private sector, will see their take-home pay decline.
4. The amount of money received after retirement, as well as the gratuity amount, will increase enabling the employees to live a better life after retirement.
5. The government also wants to simplify how much leave a worker may take during his or her job, how much leave can be carried over to the next year, and how much leave can be encashed while on the job. The revised Labour Codes have cut the 240-day work requirement for leave to 180 days of employment in a year. However, the amount of paid time off will stay the same, with one day of paid time off for every 20 days worked. Similarly, no changes have been suggested to the 30-day restriction on carrying forward leaves.
6. The federal government has recognised Work From Home (WFH) as a common market practise across sectors, particularly after the onset of the covid-19 epidemic, in the draught model standing order applicable to the service industry.
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