New Wage Code Update: The discussion around the adoption of the New Wage Code has resurfaced. This labor regulation is expected to be enacted by April, according to reports. The government is currently fine-tuning its rules before implementation to ensure that there are no issues following implementation.
The pay structure of employed persons may change dramatically. The employees' Take-Home Salary may be reduced. Apart from that, the new labor code includes regulations for things like working hours, overtime & break time.
What is New Wage Code?
By integrating 29 labor regulations, the government has created four new wage codes. The provisions governing three labor codes, industrial relations, workplace safety, health and working conditions, and social security were modified by Parliament in August 2019. These regulations were enacted in September 2020.
These Are the Four Codes
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Code on Wages
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Industrial Relations Code
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Occupational Safety & Health
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Social Security Code
Four Wage Codes to Be Applicable Simultaneously
All of these codes will be applied simultaneously, according to official sources. As per Wage Code Act of 2019, an employee's base compensation cannot be less than 50% of the cost of the company (CTC).
Many organizations are currently reducing basic salaries and increasing above-the-line allowances in order to decrease the load on the corporation.
Get Overtime, If Work For More Than 30 Minutes
There is a provision in the new draft law that allows extra labor between 15 and 30 minutes to be counted as overtime by counting 30 minutes. Under the existing rules, employees who work for less than 30 minutes are not entitled for overtime. No employee can be forced to labor constantly for more than 5 hours, according to the proposed rules. It has been mandated that he be given 30-minute break every five hours.
Salary Structure will be Completely Change
The wage structure of employees will change dramatically with the enactment of the Wage Code Act in 2019. Employees' 'Take Home Salary' will decrease as a result of the increased Basic Pay, as their Provident Fund and future will be more secure.
The contribution to the gratuity will rise in tandem with the PF. That is, the take-home pay will almost certainly rise. However, when the employee retires, he or she will receive a larger sum. Employees in the unorganized sector would also be affected by the new wage regulation. The laws governing pay and bonuses will alter, ensuring that employees in all industries and sectors are paid equally.
Adoption of the Rule To Be Implemented Soon
There has been a change in the laws on crucial topics such as working hours, yearly holidays, pension, PF, take home wage, and employee retirement, according to EPFO board member and Bhartiya Mazdoor Sangh General Secretary Virjesh Upadhyay.
According to a spokesperson of the Labor Reform Cell, Ministry of Labor, the labor union has filed a demand regarding PF and yearly holidays, requesting that Earned Leave be expanded from 240 to 300 hours.
It was originally scheduled to go into effect on April 1, 2021; however, the topic of adopting it in July gained traction, and it was finally scheduled to go into effect on October 1, 2021. However, it is currently anticipated that it will be implemented in April.
