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New labour code: Working hours, take-home salary, what changes from July 1?
Employees rooting for less number of working days in a week could get a reason to cheer as an employer could let their employees work for four days instead of five in a week. However, the catch is that while an employee may choose to work 4 days a week, they will witness a notable increase in their work hours.
New labour code: Working hours, take-home salary, what changes from July 1?
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New Delhi: The new introduction of the new labour number may bring down the number of working days in a week but the daily working hours may go up as a consequence. The in-hand salary of employees could undergo a significant change as the government is in the process of implementing the new labour rules from next month.
The Centre has introduced a set of four new labour codes which could come into effect from July 1 reportedly. There has been no official announcement yet about when the new codes will be implemented.
It is worth mentioning here that a few states haven’t framed the rules under all four labour codes yet and only 23 states and UTs have released the draft rules under the Code on Wages, Minister of State for Labour and Employment Rameshwar Teli had informed in a written reply to Lok Sabha.
So, what changes when the new code comes into effect?
4-day work week
Employees rooting for less number of working days in a week could get a reason to cheer as an employer could let their employees work for four days instead of five in a week. Too good to be true? Well, an employee may choose to work 4 days a week but they will witness a notable increase in their work hours.
Working hours
The number of work hours will rise consequently if the employee works for a lesser number of days in a week. The new wage code mandates a 48-hour work week. So, the number of work hours daily will see a steep increase.
At present, the employees working eight of nine hours a day will have to increase this to a 12-hour shift if they wish to opt for the 4-day week. This will be applicable to every industry.
PF contribution and Gratuity
Under the new labour code, an employee’s Provident Fund contribution will increase. The new rules state that the basic salary of an employee be at least 50 per cent of their gross monthly salary leading to an increase in PF contribution made by employees as well as employers.
Hence, this will hike the retirement corpus and gratuity amount of the worker.
Take-home salary
As a result of the increase in the PF contribution, the employee’s take-home salary will also take a hit and might see a reduction.
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