The Central government plans to implement new labour codes on wages, social security, occupation safety, industrial relations, health and working conditions from July 1. If implemented, the new wage code will change your salary in many ways. These laws will affect your salary structure, PF contribution, working hours, and earned leave encashment, among other changes.
As of yet, only 23 states have pre-published the draft rules for these laws. Notably, the Centre finished the process of finalising the draft rules on these codes in February 2021.
Here’s how the new wage codes will affect your salary after July 1
The new wage code states a provision entailing that the employee’s basic salary should be at least 50 per cent of net monthly CTC. This implies a reduction in the in-hand salary and a hike in other components like PF and gratuity.
The new labour laws may allow employees to have a four-day work week, provided they work for 12 hours on working days. As per the labour ministry, a 48-hour weekly work requirement is mandatory.
If implemented, the new wage code will allow employees to cash up to 300 holidays on carrying forward. Notably, the leave eligibility has been reduced from 240 to 180 days of work in a year.
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