The central government of India, headed by Prime Minsiter Narendra Modi is planning to implement the new labour law as soon as possible. In the new labour law, the working hours of the employee will be increased to 12 hours. However, as per the same law, if a company decides to increase work hours from 9 hours to 12 hours, an extra day leave will be added. Thereby, an employee, if working for 12 hours per day will get a leave of 3 days a week.
The four Labor Code rules, which the Modi Government wants to implement will encourage investment in the country and employment opportunities will increase. Labor law is an important part of the country’s constitution. So far 23 states have made rules for labor code rules. Now according to the new rules of the Labor Code, only seven states have not been able to make rules.
However, it will at least take 3 months for all the states to implement the law. Currently only 7 states in India are active with this law. However, the central government is planning to implement to all the states by July 1 of this year.
According to the new draft rule, the basic salary should be 50% or more of the total salary. This will change the salary structure of most of the employees, due to increase in basic salary, PF and gratuity money will be deducted more than before. PF is based on basic salary. With the increase in PF, the take-home or salary in hand will decrease.
With the increase in gratuity and PF contribution, the money received after retirement will increase. This will make it easier for the employees to lead a better life after retirement. The increase in PF and gratuity will also increase the cost for the companies as they will also have to contribute more to the PF for the employees. This will have a direct impact on their balance sheet.
