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The work culture in India is likely to change as the new labour laws w.e.f. 1 July 2022. From working hours to the salary received in hand, everything is likely to change after the new laws come into force. 

On 29 September 2020, The Centre notified four labour codes – the Code on Wages, Social Security Code, Industrial Relations Code, and the Occupational Safety, Health and Working Conditions Code. These codes are set to replace 29 labour laws which, since independence, have remained unchanged. However, the codes will be implemented when all the Indian states are on board. 

Here are the five major changes that are going to happen if the New Wage Code 2022 gets implemented from July 1:

  • Take-Home Salary

As per the new codes, the take-home salary will go down. The Employee’s Provident Fund (PF) will increase. The PF contribution should be a proportion of 50 per cent of the gross monthly salary. This aims at benefitting the retirement plans and gratuity amount of the employee. 

  • Change in Working Hours

Employees will get the option to work 4 days a week (assuming 12 working hours every working day instead of the usual 9 hours per day). This clearly means getting three days off every week. 

  • New annual leave rules 

The centre has also sought to rationalise

  1. The leave that employees may take while being employed
  2. The carryover of unused leaves to the following year
  3. The ability to use unused leave while still being employed
  • Reduction in Eligibility For Leave

Earlier, a new hire had to work for 240 days in order to be qualified to take a leave of absence while in accordance with the new regulations, a new hire had to work only for 180 days before being eligible to take a leave. 

The quantum of leaves earned remains constant. One day of leave is earned for every 20 days of work. 

  • Balanced Work From Home

The new rules recognize the work-from-home model. Companies following this model are required to have some basic principles in place to ensure a work life balance. 

  • New Rules for Lay Offs

Currently, all companies with up to 100 employees have an exemption from government permission for layoff, retrenchment and closure. But under The New Industrial Relation Code, the firms with up to 300 workers will be allowed to go ahead with layoffs, retrenchment, and closure without any permission from the government. 

Other Important Changes

  • The maternity leaves will increase to 26 weeks for females. No woman can be placed on the night shift without taking consent from her. They would be provided with proper facilities and security. 
  • Those who decide to leave the company will get the full and final settlement amount within 2 days of exiting the organisation

Frequently Asked Questions:

1. What are labour laws?
Labor Laws refer to laws concerning labour relations, unions and collective bargaining, wages, conditions of employment, hours or occupational safety and health.

2. How many labour codes are there in India?

  • The Code on Wages
  • The Industrial Relations Code
  • The Social Security Code
  • The Occupational Safety, Health and Working Conditions Code

3. Why do we have Labour Laws in India?
Labour Laws act as a tool to promote worker empowerment as well as the protection of workers.

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