New labour codes are now in effect across India, consolidating old laws into four clear rules. These changes affect wages, leave, and working hours for nearly all workers. Employees may see a reduction in take-home pay as retirement contributions increase. The government aims for better retirement security and gender equality. Businesses gain flexibility, with easier compliance and revised penalties.
The central government has notified a wide set of labour reforms under India’s four Labour Codes, replacing a patchwork of older laws with one clearer set of rules. These changes affect everyday basics like wages, leave, working hours and workplace security. Whether a person is employed full-time, works on a contract, or is engaged in sector-specific jobs such as media, plantations or factories, the new labour laws applies to almost all categories of workers. The notification was issued on Friday.
The new labour laws may require companies to make sure that the basic salary of the employee makes up at least 50% of the total cost-to-company (CTC), potentially prompting changes in how pay packets are structured, according to a TOI report. As a result, many employees may see a gradual reduction in take-home pay because contributions toward retirement savings are expected to increase.
With the new wage definition now in force, many employees are now wondering what it means for their salary structure, especially basic salary, PF...
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