As per the latest developments, the Central Government is going to implement the new labour laws from 1st July 2022. Once the new labour laws come into force, there will be a significant change in employees’ office working hours, EPF contributions and the take-home salary.
Employees will be able to get three week offs. However, this does not mean a reduction in the weekly working hours and may in fact result in employees working for 10 to 12 hours per day for four days. The news laws will also increase maximum hours of overtime from 50 hours (under the Factories Act) to 125 hours, for a quarter across all sectors.
Change in the ratio of the take-home salary and the employer’s and employee’s contribution in PF (provident fund) is another significant change that the new labour laws will bring in. This will mean that the employees’ basic salary will have to be 50% of the gross salary. This will in turn increase the PF contributions of the employer and the employees, particularly those working in private firms. The move aims to help employees live a better life after retirement as it will increase the money that they receive after retirement as well as the gratuity amount.
Via the new labour laws, the Central Government also seeks to rationalize the leaves an employee can take during his/her tenure, the policy of carrying forward leaves to the next year and leave encashment. Apart from this, the government is also recognising work from home structure for the service industry in its draft model.
Even though there is no official intimation yet, 23 states have framed rules under the new labour codes, which have been passed by the Parliament and media reports suggest that they are likely to come in effect starting next month.