The New Wage Code is about to reach its stage of completion by the Central government and will be implemented in this financial year. Many changes have been made under this bill regarding holidays, salary and working hours of the employees.
The decision on EPF, Salary, Pension likely
According to EPFO board member and General Secretary of Bharatiya Mazdoor Sangh, Virjesh Upadhyay, some important changes are to be made in the new labor laws. Notably, the rules are to be applied on important issues like working hours of employees, annual holidays, pension, PF, take-home salary, retirement. The consent of the states is also necessary to implement the new rules which is the main reason behind its delay. However, before the new wage code is implemented, the draft line and notification of the same will be issued.
There is a demand to increase the limit on holidays
On a condition of anonymity, an official of the Labor Reform Cell of the Labor Ministry has revealed that the labor union has put forth a demand regarding PF and annual holidays.
The union wants that the limit of earned leave to increase from 240 days to 300 days. Separate rules may be made for the building and construction sector, beedi workers, journalists, and people associated with the field of cinema.
Changes in EPF rules
According to Virjesh Upadhyay, demand has been made from the government that the eligibility of the Employees' Provident Fund Scheme (EPF) should be increased from Rs 15,000 to Rs 25,000 or at least Rs 21,000 like the Employees' State Insurance Scheme. The final round of discussions on the laws is going on.
What is the new wage code?
The central government has created 4 new codes by combining 29 central labor laws. These include the Industrial Relations Code, Code on Occupational Safety, Health and Working Conditions Code (OSH), Social Security Code, and Code on Wages. Some new concepts have been introduced in labor codes. But, the biggest change is the expansion of the definition of 'wage'. The new labor code is aimed at consolidation i.e. 50% of the salary will be directly included in the wages.
What does the new wage code entail?
As per the Wage Code Act, the basic salary of an employee cannot be less than 50% of the cost to the company (CTC). At present, many companies reduce the basic salary and give more allowances additionally so that the burden on the company is reduced.
Take-home salary will decrease, better retirement benefits
According to experts, if the PF of employees will be deducted more due to an increase in Basic Pay, then their take-home salary may be less, but their future will be more secure. This will give them more benefits on their retirement, as their contribution to Provident Fund (PF) and Monthly Gratuity will rise.
