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Update on new wage code! Labor Ministry has given big information, know when it will be implemented

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New Wage Code: Big news! New update on the rule of working 3 days off and 4 days in a week. see details

New Wage Code India Updates: The Labor Ministry is in discussion with the HR heads of all sectors regarding the wage code. Labor and Employment Minister Bhupendra Yadav told in an interview to Economic Times that the issues would be implemented through rules without changing the existing framework of rules. Let’s know the new update on this side.


New Delhi: New Wage Code India Updates: The government may soon implement the new Wage Code. Earlier it was going to be implemented from April 1, after that, it was likely to be implemented from October. But it was not implemented due to speculations by the state governments. Now this rule can be implemented from the new financial year. The Labor Ministry is in discussion with HR heads of all sectors regarding the wage code. Labor and Employment Minister Bhupendra Yadav told in an interview to Economic Times that the issues would be implemented through rules without changing the existing framework of rules.

When will it be applicable?
The minister said, 26 states have notified the rules on the wage code and all the states are working on notifying the rules on all the four codes. We have implemented the Social Security Code partially, but we want to see all four come together in a comprehensive way. The government will do everything unanimously and in a transparent manner.

1. Holidays of the year will increase to 300
Earned Leave of employees can be increased from 240 to 300. Many provisions were discussed between the Labor Ministry, Labor Union and representatives of the industry regarding changes in the rules of the Labor Code. In which there was a demand to increase the Earned Leave of the employees from 240 to 300.

2. Salary Structure Will Change
Under the new wage code, there will be a change in the salary structure of the employees, their Take Home Salary can be reduced. Because according to the Wage Code Act, 2019, the basic salary of an employee cannot be less than 50% of the cost of the company (CTC). At present, many companies reduce the basic salary and give more allowances from above so that the burden on the company is reduced.

3. Allowances to be deducted

There are three to four components in the cost-to-company (CTC) of an employee. Basic salary, House Rent Allowance (HRA), retirement benefits like PF, gratuity and pension and tax saving allowances like LTA and entertainment allowance. Now in the new wage code, it has been decided that allowances cannot exceed 50% of the total salary at any cost. In such a situation, if the salary of an employee is Rs 50,000 a month, then his basic salary should be Rs 25,000 and his allowances should come in the remaining Rs 25,000.

That is, till now the companies which used to keep the basic salary at 25-30 percent, and the remaining part was from the allowance, they can no longer keep the basic salary less than 50 percent. In such a situation, companies will also have to cut many allowances to implement the rules of the new wage code.

4. What’s special in the new wage code
Many such provisions have been given in the new wage code, which will affect even the salaried class working in the office, workers working in mills and factories. From the salary of the employees to their holidays and working hours will also change. Let us know some provisions of the new wage code, after the implementation of which your life will change a lot.

5. Working Hours Will Increase and Weekly Off Will Also Increase
Under the new wage code, the working hours will increase to 12. The Ministry of Labor and Employment said that in the proposed Labor Code, it has been said that the rule of 48 hours of work in a week will be applicable, in fact some unions had questioned the rule of 12 hours work and 3 days leave. In its clarification on this, the government said that there would be a rule of 48 hours of work in a week, if someone works for 8 hours a day, then he will have to work 6 days a week and will get one day off.

If a company adopts work for 12 hours a day, then it will have to give leave to the employee for the remaining 3 days. If the working hours increase, then the working days will also be 5 or 4 instead of 6. But for this, it is also necessary to have an agreement between both the employee and the company.

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