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India’s new labour codes likely in 2022; 4-day work-week, reduced salary and more

According to a senior official, the four labour regulations covering salary, social security, occupational safety, industrial relations, health and working conditions are expected to be enacted by the following fiscal year. Working hours, wage restructure, and PF contribution, to name a few, would all be affected by the new wage law once it is enacted. At least 13 states have pre-published draft rules on these laws, according to the official, and the Centre completed the process of finalising the draft regulations on these codes in February 2021.

The central government announced 4 labour rules on August 8, 2019: the Code on Social Security, the Industrial Relations Code,2020, the Wage code, 2019 and the Code on Occupational Safety, Health, and Working Conditions, 2020. Because labour is a concurrent subject, the Centre wants the states to accept it all at once, according to the source. Employees’ take-home pay for the following fiscal year, i.e. April 2021, may be reduced as a result of the government’s Code on Wages, however components such as PF and Gratuity may increase. This is because the new pay rule stipulates that an employee’s basic income must equal at least 50% of their net monthly CTC. As a result, if this provision is implemented, employees will be unable to earn more than 50% of their net monthly compensation in the form of an allowance. As a result, the employee’s gratuity and PF payment are likely to increase. As a result, while employees’ take-home pay may decrease, the Gratuity and PF component of their salary may increase.

Experts believe that the new draft will have an impact on employees’ working hours, with some news sources reporting that employees may be allowed a four-day workweek starting next year, however they will be required to work for 12 hours on those four days. The ministry of labour appears to have said unequivocally that a minimum of 48 hours weekly work is required.

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