New Delhi: Four labor codes on wages, social security, industrial relations and occupational safety, health and working conditions are likely to be implemented by the next financial year, a senior official told news agency PTI. Once implemented, the new wage code will affect working hours, wage restructuring and PF contribution among key people.
At least 13 states have pre-published the draft rules on these laws, while the Center has completed the process of finalizing the draft rules on these codes in February 2021, the official said. The Central Government has notified four labor codes, namely the Code. On Salaries, 2019, as on August 8, 2019, and on the Code of Industrial Relations, 2020, Code on Social Security, 2020 and on Occupational Safety, Health and Working Conditions Code, 2020 on September 29, 2020.
Since labor is a concurrent subject, the Center wants the states to implement it in one go, the official said.
The government notification on Code on Wage 2019 may reduce the take-home pay of employees in the next financial year i.e. April 2021, while components such as PF and gratuity may increase. This is based on the premise that the new wage code stipulates that the basic pay of the employee shall be at least 50 per cent of his net monthly CTC. Therefore, if this provision comes into force, it would mean that employees would not be able to receive more than 50 per cent of their net monthly salary as allowances.
This also means that there will be a resultant increase in the employee’s gratuity and PF contribution. Therefore, while the take home pay of employees may be reduced, the gratuity and PF component may increase.
Experts are also of the view that the new draft will affect the working hours of employees, with some media reports saying that employees may be allowed a four-day work week from next year, but they will be allowed those four days. I have to work for 12 hours. The Ministry of Labor has clearly made it clear that 48 hours weekly work is required.
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