Big News! Salary and working hours change from October 1…know everything about the new rules

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New Labor Code: Chances of getting gratuity only for one year's job, not 5 years! Know the complete math of Gratuity
New Labor Code: Chances of getting gratuity only for one year's job, not 5 years! Know the complete math of Gratuity

The Labor Ministry and the Modi government want to notify the rules of the Labor Code by October 1. Parliament on August 2019 changed the rules related to three labor codes, industrial relations, safety of work, health and working conditions and social security. These rules were passed on September 2020.


There is an important news for the employed people. There may be a change in your salary structure from October 1. The Modi government has set a target to implement from October 1. According to the rules of the Labor Code, the working hours of the employees can be changed to 12 hours. Soon government and private sector employees can see major changes in their salary, gratuity and provident fund (PF). The Labor Ministry and the Modi government want to notify the rules of the Labor Code by October 1. Parliament on August 2019 changed the rules related to three labor codes, industrial relations, safety of work, health and working conditions and social security. These rules were passed on September 2020.

The government wanted to implement the rules in the new labor code from April 1, 2021, but they were postponed due to lack of preparation of the states and giving more time to the companies to change the HR policy. According to the Labor Ministry, the government wanted to notify the rules of the Labor Code from July 1, but the states sought more time to implement these rules, due to which they were postponed till October 1.

In the draft rules of the code, there is a provision to include extra work between 15 and 30 minutes in overtime by counting 30 minutes. Under the current rule, less than 30 minutes are not considered eligible overtime. The draft rules forbid any employee to work continuously for more than 5 hours. Giving employees half an hour’s rest after every five hours

According to the new draft rule, the basic pay should be 50% or more of the total salary. This will change the pay structure of most of the employees. With the increase in basic salary, the amount deducted for PF and gratuity will increase because the money learned in this is in proportion to the basic salary. If this happens, the salary coming to your home will decrease, the PF and gratuity money received on retirement will increase.

According to the new proposed rules, the basic salary should be 50 percent or more of the total salary. In such a situation, the entire structure of salary will change. Till now the share of allowances in the salary used to be high. After increasing the basic salary, the PF will also increase. After this the take home salary will be reduced. However, it will be beneficial at the time of retirement.


With the increase in contribution to gratuity and PF, the amount received after retirement will increase. With the increase in PF and gratuity, the cost of companies will also increase. Because they too will have to contribute more to the PF for the employees. These things will also affect the balance sheet of the companies.

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