4-day work week, lower salary, and more; everything you need to know about India’s new wage codes, which are set to go into effect in 2022
According to a senior official, the four labour regulations covering pay, social security, industrial relations, occupational safety, health, and working conditions are expected to be enacted by the following fiscal year. Once implemented, the new wage law will have a significant impact on working hours, salary restructure, and PF contribution, to name a few. According to the official, at least 13 states have already pre-published draught rules on these laws, and the Centre has completed the process of finalising the draught regulations on these codes in February 2021.
The central government announced four labor codes on August 8, 2019: the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020, and the Occupational Safety, Health, and Working Conditions Code, 2020.
Because labour is a concurrent topic, the Centre wants the states to adopt it all at once, according to the official. Employee take-home pay for the following fiscal year, i.e., April 2021, may be reduced as a result of the government’s Code on Wages 2019 announcement, but components such as PF and Gratuity may increase. This is due to a provision in the new pay law that requires the employee’s basic income to be at least 50% of their net monthly CTC. As a result, if this provision is implemented, employees will be unable to receive more than 50% of their net monthly pay as an allowance. As a result, the employee’s gratuity and PF payment would increase.
As a result, while employees’ take-home pay may decrease, the Gratuity and PF component may rise. Experts believe that the new draught will have an impact on employees’ working hours, with some media outlets reporting that employees may be allowed to work a four-day workweek beginning next year, though they will have to work 12 hours on those four days. The labour ministry appears to have stated unequivocally that a weekly work minimum of 48 hours is required.
