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Change in take-home salary and 4-day work week: Things to expect from July 1

From in-hand salary all the way to working hours, several aspects when it comes to employment and work culture as a whole are expected to change from July 1 if the new labour codes are implemented.

Here are the expected changes under the new labour codes:

1) If the Centre implements the new labour laws, including the new wage code, the work hours can be increased to 12 a day (instead of 8). However, the companies will need to opt for a 4-day work week, with three days off.

2) The take-home salary will go down as the PF contributions of the employees and the employer will increase. Under the new codes, the provident fund contribution is required to be a proportion of 50 per cent of gross pay.

3) The new rules – reportedly aimed at improving an employees' well-being –recognise the work-from-home structure which came into practice amid the Covid-19 pandemic.

4) The new rules have increased the eligibility requirement for leaves from 240 days of work to 180 days of work in one year which means an employee has to work for 240 days after joining a new job to be eligible for getting a leave.

5) The new industrial relation code also allows the companies with up to 300 workers for lay-offs, retrenchment and closure with government permission.

The central government has notified four labour codes, namely, the Code on Wages, 2019, on August 8, 2019; the Industrial Relations Code, 2020, the Code on Social Security, 2020, and the Occupational Safety, Health and Working Conditions Code, 2020 on September 29, 2020. However, the Centre as well as states are required to notify rules under the four codes to enforce these laws in respective jurisdictions. According to reports, only 23 states and Union territories have published the draft rules under the Code on Wages.

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