New Wage Code: Here’s how it will impact your PF, salary, gratuity and pension
Many changes have been implemented starting from employee holidays to salaries and working hours have been enacted as a result of this bill.
- The laws will be applied to major concerns such as employee working hours, yearly holidays, pensions, PF, take-home pay, and retirement.
- Earned leave should be increased from 240 to 300 days.
- Take-home salaries will be reduced.
The Central Government is nearing the conclusion of the New Wage Code, which will be implemented this fiscal year. Many modifications have been implemented starting from employee holidays to salaries and working hours have been enacted as a result of this bill.
EPF, Salary, Pension decisions
According to Virjesh Upadhyay, an EPFO board member and the General Secretary of the Bharatiya Mazdoor Sangh, the new labour regulations would include some significant modifications. The laws will be applied to major concerns such as employee working hours, yearly holidays, pensions, PF, take-home pay, and retirement. The states' consent is also required to apply the new rules, which is the main cause for the delay. The draught line and notification of the new wage code will be given before the new wage code is implemented.
Limit on holidays
An official from the Labor Ministry's Labor Reform Cell said, on the condition of anonymity, that the labour union has made a demand regarding PF and yearly holidays.
Earned leave should be increased from 240 to 300 days, according to the union. Building and construction workers, beedi workers, journalists, and anyone involved in the film industry may all have their own set of norms.
Changes in EPF rules
According to Virjesh Upadhyay, the government has been asked to raise the eligibility for the Employees' Provident Fund Scheme (EPF) from Rs 15,000 to Rs 25,000, or at least Rs 21,000, as is the case with the Employees' State Insurance Scheme. The final round of legislative debates is currently underway.
What is the new wage code?
By consolidating 29 central labour regulations, the central government has developed four new codes. The Industrial Relations Code, the Occupational Safety, Health, and Working Conditions Code (OSH), the Social Security Code, and the Wage Code are all examples of these codes. Labor codes have been updated to include certain new concepts. The most significant change, however, is the broadening of the concept of 'wage.' The new labour code aims for consolidation, with 50% of the salary being directly incorporated in the compensation.
What does the new wage code entail?
According to the Wage Code Act, an employee's basic compensation cannot be less than half of the company's cost (CTC). Many organisations are currently reducing basic salaries and providing additional allowances in order to decrease the load on the company.
Take-home salary to reduce
According to experts, if employees' PF contributions are increased as a result of an increase in Basic Pay, their take-home pay will be lower, but their future will be more secure. As a result, their contributions to the Provident Fund (PF) and Monthly Gratuity will increase, providing them with extra benefits in retirement.