New Labour Codes Explained For Salaried Employees

The new four labour codes are the Code on Wages, 2019, on August 8, 2019, and the Industrial Relations Code, 2020, the Code on Social Security, 2020, and the Occupational Safety, Health and Working Conditions Code, 2020 on September 29, 2020.

By Mallika Mehzabeen
Updated: Fri, 01 Jul 2022 05:35 PM IST
Minute Read
New Labour Codes Explained For Salaried Employees
File Picture

India's four new labour codes could be implemented soon. The new codes, incouding the Code on Wages, the Industrial Relations Code, the Code on Social Security, and the Occupational Safety, Health and Working Conditions Code, will bring a lot of new changes for salaried employees. Once these new codes come into effect, it will help the employees to get their full and final settlement of wages and dues within two days of the employee's last working day. Not only that, a lot of other changes will also be made starting from take-home salary to working hours.

Let's discuss all these new codes in detail.

1. Full and final settlement within 2 days of resignation

As per the new wage code, "Where an employee has been - (i) removed or dismissed from service; or (ii) retrenched or has resigned from service, or became unemployed due to closure of the establishment, the wages payable to him shall be paid within two working days of his removal, dismissal, retrenchment or, as the case may be, his resignation."

2. Changes in earned leave policy

People can witness one of the biggest changes in the case of earned leaves. Currently, the government department grants 30 leaves a year. People who work as defense employees get 60 holidays a year. In some cases, employees have the opportunity to cash up to 300 holidays on carry forward. However, now, the demand of the labour union is to increase the number of holidays to 450.

3. 12-hour work-week and 4 days of work in a week

This is a tricky one. There are many people who want to work only 4 days a week. So, as per some media reports, the employees who want to work 4 days a week have complete a 12-hour shift on those 4 days. However, a concrete information on the same is awaited.

4. Higher PF after implementation of Wage Code

This means that employees will get a consequent increase in gratuity and PF contribution of the employee. This is may result in a reduction in the take-home pay of the employees.

5. Reduction in-hand salary

As per the notification on Code wages 2019, the employers may witness a reduction in their take-home pay while components like PF and Gratuity might rise. The new wages code entails that the basic salary of the employee will be at least 50 percent of his/her net monthly CTC.

This website uses cookie or similar technologies, to enhance your browsing experience and provide personalised recommendations. By continuing to use our website, you agree to our Privacy Policy and Cookie Policy.