4-Day Work Week, Change In Take-Home Salary: 5 Things To Know About New Labour Codes

The newly prescribed labour codes, if implemented, will result in increased working hours, PF contributions, and decreased in-hand salary of the employees.

By Anushka Vats
Fri, 24 Jun 2022 05:54 PM IST
Minute Read
4-Day Work Week, Change In Take-Home Salary: 5 Things To Know About New Labour Codes
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The Centre may implement the new labour laws from July 1, 2022. If implemented, the law will bring major changes to all the industries and sectors in India. It will include modifications based on working hours, annual leave, take-home salary, etc.

The newly prescribed labour codes, if implemented, will result in increased working hours, PF contributions, and decreased in-hand salary of the employees. Here are the five changes that may take place once the codes are implemented.

1.Under the new labour laws, the companied will have an option to change the number of working days of employees from 5 to 4 days a week but at the same time it mandates total working hours of 48 per week.

2.The employees will need to work for 12 hours instead of eight, so that the total weekly work hours don't get affected.

3.The law will also improvise the Provident Fund (PF) contributions. The employee will get a 50% of the gross salary as their basic salary. The PF contributions of the employees will increase and the take-home salary will come down.

4.Meanwhile, it recognises the work-from-home structure which came into practice amid the Covid-19 pandemic.

5.The leave schemes are also expected to be rationalised as per the codes. While the quantum leaves in a year will go untouched, employees will now earn a leave for every 20 days of work instead of 45. The new employees will also be able to earn leaves after 180 days instead of 240 days of work.

Above all, the retirement corpus and gratuity amount will increase under the new law.

Currently, several countries including, Spain, Japan, New Zealand, Ireland, Scotland, and Iceland have a four-day work week. However, they have also reduced the number of weekly working hours.

What Are The New Labour Codes?
The four labour codes that are set to be implemented are,
(a)the Code on Wages, 2019,
(b)the Industrial Relations Code, 2020
(c)the Code on Social Security, 2020 and
(d)the Occupational Safety, Health & Working Conditions Code, 2020,

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