The new labor laws, which will bring significant changes to the take-home pay, contribution to the PF (provision fund) and working hours, including hours and days of work in a week, have been passed by Parliament but have been delayed as Indian states introduce these regulations have not yet been communicated.
While the center planned to enact these new labor laws from July 1, the laws have not yet come into effect as a few states have not yet enacted the rules under all four labor laws.
The four new labor laws have been formed by revising and combining the previous 29 central labor laws, including pay, social security, industrial relations, occupational safety, health and working conditions.
Under the new wage code, the base salary component must be 50 percent of the total wage, reducing the carry-over salary increase in the Contribution to the Employees’ Provident Fund because that part is set at 12 percent of the base salary.
Under the new labor laws, the pension corpus and the amount of tips will increase due to the increase in the basic wage component of the employees in the total salary.
The code also says that companies can increase their employees’ working hours to 12 hours a day, from 8-9 am currently, but should provide three weekly hours of leave.
The number of working days per week is therefore reduced to four, but the number of working hours per week remains the same. Under the new wage scheme, a total of 48 hours a week is a must.
The changes to the newly prescribed labor codes should have come into effect from July 1. Still, only 23 states and union territories (UTs) have released the draft guidelines under the wage code, according to a written response from Labor and Employment Minister Rameshwar Teli when asked about the timing of implementation in the Lok Sabha.
According to the constitution, labor matters must be reported by states before the laws drafted and passed by parliament can be implemented.