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Home Personal Finance Big News: Salary, PF, Gratuity, Working Hours Likely to Change From October...

Big News: Salary, PF, Gratuity, Working Hours Likely to Change From October 1 – Details Here

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According to the draft labour law which is likely to come into effect from Oct 1, basic pay of the employees will be 50% or more of the total salary.

Prime Minister Narendra Modi-led government at the Centre is set to implement several changes in the rules of labour law from October 1. According to new labour law, the working hours of employees are going to be increased from 9 hours to 12 hours.


The in-hand salary of the employees will also change after the implementation of the new labour law.

According to the draft labour law, the basic pay of the employees will be 50% or more of the total salary. The implementation of the labour law will also affect the salary structure of most employees as the non-perks part of the salary will come below 50 per cent of the total salary. It is likely thatother allowances in the total salary will also change after the implementation of new labour law.

It is to be noted that the hike in basic salary will directly affect the PF as it is based on basic pay. An increase in the basic pay will increase the PF, and this will result in a cut in the take-home salary.

According to experts, the increase in contribution to gratuity and PF means that the amount an employee will receive after retirement will increase. It is learnt that maximum change in pay structure will be witnessed by highest-paid employees. The increase in PF and gratuity means that the cost of companies will also increase and the companies will now have to contribute more to the PF for the employees.


In the new draft law, it has been proposed to increase the maximum working hours to 12. The draft rules also provide for extra work between 15 and 30 minutes to be counted as overtime for 30 minutes. Under the current rule, less than 30 minutes are not considered eligible overtime.

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