There could be major changes in official working hours, provident fund and gratuity from April 1, 2021. With the three wage code bills likely to come into effect from April 1 this year, there could be an increase in gratuity and PF, while the take-home salary could decrease.
Under the new definition of wage, the allowances will be a maximum of 50% of the total salary. This means that the basic pay (basic pay and dearness allowance in government jobs) should be 50 per cent or more of the total salary from April. It is noteworthy that for the first time in the country's 73-year history, labour laws are being changed. The government claims that will prove beneficial to both employers and workers.
Salaries will be reduced but PF will increase
As per the new draft rule, the basic pay should be 50% or more of the total salary. This will change the salary structure of most of the employees, as the non-allowance portion of the salary is usually less than 50 per cent of the total salary. The share of allowances in the total salary becomes even higher. Increasing the basic pay will also increase your PF. PF is based on basic pay. The increase in basic pay will increase the PF, which means that the pay in the tech-home or hand-in-hand will be deducted.
The amount at retirement will increase
The increase in gratuity and PF contribution will eventually increase the amount received after retirement. This will make it easier for people to live a pleasant life after retirement. The salary structure of high-paying officers will change the most and will be the worst affected. The increase in PF and gratuity will also increase the cost of companies. Because they also have to contribute more to the PF for the employees. These things will also affect the balance sheets of the companies.
New rules to be proposed for 12 hours of work, overtime
The new draft law has proposed to increase the maximum hours of work to 12. The draft rules of the OSCH code also provide for the inclusion of additional work between 15 and 30 minutes in overtime by counting 30 minutes. Less than 30 minutes in the current rule is not considered overtime qualified.
Employees won't work for more than five hours
The draft rules prohibit more than 5 hours of continuous work from any employee. Instructions to give half an hour rest to the employees every five hours are also included in the draft rules.
