From Working Hours, Salary to PF: Changes Likely to Take Place From 1 July Under New Labour Laws

As per several media reports, the government is planning to implement new labour laws from 1^st July 2022. The Central government is working on framing 4 new labour codes in which there will be important changes in employees’ salary, PF contributions & working hours.

Media reports also said that Prime Minister is trying to execute the labour codes as early as possible. However, it may take least 3 months for the new labor laws to come into effect as many states have not prepared the drafts yet.

A government official told PTI that the 4 labour codes are expected to be implemented in the next financial year of 2022-23 as many states have finalized draft rules on these. The official said that the Government has completed the process of finalizing the draft rules on these codes last year.

He further told that as the labor law is a simultaneous subject, the Central government wants the states to implement these in one go.

What are the New Labour Laws

The 4 labour code rules under the New Labour Laws will boost investment in India and as a result, the employment opportunities will also increase.

So far, 13 states have prepared the drafts for labour code rules. These states are Uttar Pradesh, Madhya Pradesh, Uttarakhand, Chhattisgarh, Odisha, Arunachal Pradesh, Manipur, Bihar, Haryana, Jharkhand, Punjab, Himachal Pradesh and Jammu and Kashmir.

The Labour Code Rules include four labour codes i.e. wages, social security, industrial relations & occupation safety & health and working conditions. The Parliament has passed these codes.

Changes that will take place from July 1, 2022

Working hours: If the government implements new labour laws from 1^st July 2022 then the office working hours could increase from 8 to 9 hours to 12 hours. After new rule comes into effect, firm/organizations may make the employees work for 4 days instead of 5, and there will be 3 day week off.

In-hand Salary & PF contribution: According to the new labour laws, the basic salary would be 50 percent or more of the total salary. But, this will impact the salary structure of many employees.  Due to the increase in basic salary, the PF and gratuity money will be deducted more. Also as there will be hike in the PF contribution, the in-hand salary will decrease.

It must be noted that as gratuity & PF contribution will increase, the money received after employee’s retirement will also increase.