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How New Labor Laws in India will impact on working hours & salary

The new labor laws will change the way you and your co-workers work which is going to be came into effect from July 1st.

The President approved the Modernization of Employment Law. The four codes allotted for wages, health and working conditions, social security and occupational safety, and industrial relations have been notified.

Some changes will include an impact on salary, contribution to the provident fund (PF), or working hours. Let’s see how this affects employees.

New labor codes have been created as a result of subsuming 29 central laws. With unanimous consent in the parliament, all 29 laws have passed through. The states are now required to notify and implement these rules in their respective jurisdictions.

Out of all the 28 states, only 23 states and Union Territories have framed the rules under the new Labor Codes.

Your office may switch to a 12-hour work shift

Given the new labor code, companies have been able to increase their employees work hours to 12 hours, up from nine at present.

Companies with 12-hour shifts will have to provide 3 days off each week. Means now employee have to work for four days in a week only.

Now, the new Wage Code mandates that employees cannot be forced to work more than 48 hours each week.

New labor laws in India may lead to a pay raise for some Indian workers

The laws previously state that employees who have worked 240 days must take a leave day. This new law, however, has changed this and now allows them to work 180 days straight.

Your salary and work timings may change due to new labor laws

With the new wage code, the basic salary is set at least 50% of the gross monthly salary. This will help increase employees’ and employers’ PF contributions by providing extra funds from the reduced monthly salaries.

This can result in an increase of retirement corpus and gratuity amount, leading to lower in-hand salary. Private sector will be the most impacted by this.

Related: 10 Reasons Why You need to be Transparent with your Employees

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