New Labour Codes 2022
New Labour Codes 2022
The new labour laws which were to be implemented on 1st July 2022 for all the
corporates and organizations under the registration of the ministry of corporate
affairs have been postponed as of now due to multiple states not agreeing on the
terms. The new labour law will shrink working hours, and PF as well as the in-
hand salary of employees in the process.
The latest labour laws would be reducing the take-home salary of the employees
by increasing the HRA as well as the PF categories of the salary structure. Apart
from that, new labour laws 2022 will also extend working hours to 12 hours a
day as per the reports.
One of the biggest impacts of the new labour law will be on the take-home
salaries, which is expected to reduce, owing to the fact that the government is
eyeing increasing contributions towards provident fund (PF) and other post-
retirement schemes. The new laws are expected to come into play soon, which
will force employers to modify their employee compensations.
The Centre has finalised the four codes related to wages, social security,
industrial relations and occupational safety. Now it is up to the states to
implement them.
1. The new wages code makes it compulsory for organisations to make sure
that 50 per cent of employees’ CTC is basic pay, while the remaining 50
per cent comprises other employee allowances, including house rent,
overtime, etc. If the company pays any additional exemptions or
allowances that exceed 50 per cent of the CTC, the same will be treated
as remuneration to be added to the wages.
2. Under the new wages code, the gratuity amount will be calculated on a
larger salary base, which will include basic pay plus allowances such as a
special allowance on wages. This is expected to increase the gratuity
cost of companies. While increasing the social security (pension)
components of wages, the new laws are likely to decrease the take-home
salary of employees.
3. There is also a rule incoming for any 15 minutes or more overtime will be
attracting overtime payment to the employees
The government has also made it clear that 48 hours is the maximum
limit for a one-week work capacity and the employers are flexible to
choose this work time and make it available in 4 days, 5 days, or 6-day
week structure.
5. The professionals who are leaving the country have to be sorted with the
final settlement completed within a time limit of 2 days of leaving the
company.