After the Agnipath scheme, the Central government is in the process of revamping the labour laws in the country and implementing new labour laws from July 1, 2022. According to the government officials, the aim is to attract more investors to the country.
Salary, PF
Apparently, there will be a significant change in office working hours, employees provident fund (EPF) contributions and in-hand salary, if the laws are implemented.
However, the office hours and PF contributions are likely to increase, whereas the in-hand salary will likely decrease.
The government is in the opinion to bring in reforms related to wages, social security (pension, gratuity), labour welfare, health, safety and working conditions (including that of women).
Change in working hours for labour
The office working hours will change if new labour laws are implemented from July 1, 2022. The offices can increase the office working hours from 8-9 hours to 12 hours. But they will have to compensate their employees by giving them three weekly offs.However, the total working hours in a week will not be altered.
Additionally, the maximum number of overtime hours for workers has been increased from 50 hours (under the Factories Act) to 125 hours (in new labour codes) in a quarter across industries.
There will be a significant change in the take-home salary component and employers’ contribution to the provident fund. The new codes may put the employee’s basic salary at 50% of the gross salary. It will increase the PF contributions of the employee and the employer. The take-home salary will decrease for some employees, especially those in the private sector.
Retirement and gratuity
The money received after retirement and the gratuity amount will also increase. This will enable employees to lead a better life after retirement.
Moreover, the government aims to rationalise the leaves an employee can avail during his/her tenure of employment. Rules regarding the leaves carry forward to the succeeding year and the encashment of leaves will change.
It is understood that the leaves are reduced to 180 from 240 days of work in a year.
However, the quantum of leave earned will remain unchanged, that is 1 day of leave earned for every 20 days of work. Similarly, no change has been proposed in the limit on carry forward of leaves. It remains same at 30 days.
In addition to that, Work From Home (WFH) which has become prevalent after the outbreak of the covid-19 pandemic. This WFH has been recognised by the central government.
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