New Wage Code Updates: The new Wage Code may be implemented soon by the government. It was supposed to go into effect on April 1st, but it looks like it will start in October. However, due to state government speculations, it was not implemented.
This rule can now be implemented beginning with the new fiscal year. By this time, all states will have to finalize the draft rules. Employees' salaries, vacations, and other benefits will be altered as a result of this.
Salary Structure To Change
Employees' Take Home Salary may be lowered under the new wage rule, resulting in a change in their salary structure. Because, according to the Wage Code Act of 2019, an employee's base compensation cannot be less than half of the company's cost (CTC). Many organizations are currently reducing basic salaries and increasing above-the-line allowances in order to decrease the load on the corporation.
Holidays Increases To 300
Employees' earned leave might be expanded from 240 to 300 hours. The Labor Ministry, the Labor Union, and business representatives addressed a number of provisions relating to modifications to the Labor Code's rules. There was a demand to increase employees' Earned Leave from 240 to 300 hours.
Working Hours Along With Weekly Off’s To Be Increased As Well
Working hours will be increased to 12 under the new wage regulation. According to the Ministry of Labor and Employment, the proposed Labor Code states that the norm of 48 hours of labor per week will apply, despite the fact that several unions had questioned the rule of 12 hours of work and three days off. The government clarified that there will be a 48-hour work week rule, which means that if someone works for 8 hours a day, he will have to work 6 days a week and will get one day off.
If a corporation adopts a 12-hour workday, the employee must be given leave for the remaining three days. If working hours are increased, working days will be reduced to 5 or 4 instead of 6. However, an agreement between the employee and the firm is also required for this.
New Rules To Implement, Allowances to be Deducted
An employee's cost-to-company (CTC) is made up of three to four components. Basic income, HRA, retirement benefits such as Provident Fund, gratuity, and pension, and tax-saving allowances such as LTA and amusement allowance In the new wage legislation, allowances are no longer allowed to exceed 50% of the entire income. If an employee's monthly income is Rs 50,000, his base wage should be Rs 25,000, and his allowances should be paid out of the remaining Rs 25,000.
That is, organizations that previously kept the basic wage at 25-30% and supplemented it with allowances can no longer retain the basic income below 50%. In such a case, businesses will be forced to reduce various allowances in order to comply with the new pay code's standards.
What Is Special In New Wage Code?
Many such rules have been included in the new pay law, which will affect even salaried office workers, as well as mill and factory workers. Employees' salaries, as well as their vacations and working hours, will all alter. Let us go over some of the requirements of the new pay law, which will have a significant impact on your life once it is implemented.
