Employees in India may be able to enjoy a four-day workweek from next year if the new labor codes are implemented, as opposed to the current five-day workweek.
According to a senior government official cited by the PTI news agency, India is likely to implement four new labor codes on wages, social security, industrial relations, and occupational safety by the next fiscal year beginning in 2022. A number of aspects of employment and work culture, in general, may change as a result of these new codes, including employees’ take-home pay, working hours, and the number of weekdays.
Employees in India may be able to enjoy a four-day workweek from next year if the new labor codes are implemented, as opposed to the current five-day workweek. Employees will have to work for 12 hours on those four days in that case, as the labor ministry has stated that the 48-hour weekly work requirement must be met even if the proposal is approved.
The labour codes take on added significance in light of the fact that once implemented, employees’ take-home pay will be reduced, and businesses will be responsible for a higher provident fund liability.
More PF, less take-home pay
According to experts evaluating the proposed labour codes, the new laws will significantly alter how employees calculate their basic pay and provident fund contributions (PF). Employees’ monthly contributions to their PF accounts will increase under the new codes, but their monthly in-hand salary will decrease.
The regulations limit allowances to 50% of the salary, implying that half of the salary is basic wages, and provident fund contributions are calculated as a percentage of the basic wage, which includes both the basic pay and the dearness allowance (DA).
The employer’s percentage-based contribution to the PF balance is determined by the employee’s basic pay and dearness allowance under current labour regulations. For example, if an employee’s monthly salary is $50,000, they may receive 25,000 in basic pay and the remaining 25,000 in allowances. However,
Finalized labour codes are expected to go into effect next fiscal year.
Because labour is a concurrent subject, the central government has already finalized the rules under the four labour codes, and states must now draught their own regulations.
“The four labour codes are likely to be implemented in the next financial year of 2022-23,” a senior government official was quoted as saying by PTI. “A large number of states have finalized draught rules on these.” “In February 2021, the Centre completed the process of finalizing the draught rules for these codes.” However, because labor is a concurrent subject, the Centre wants the states to implement both at the same time.”
Draft rules have been pre-published in at least 13 states.
According to the official, at least 13 states have already pre-published draught rules on these laws.
In a reply to the Rajya Sabha earlier this week, Union labor minister Bhupender Yadav said that the Occupational Safety, Health, and Working Conditions Code is the only one on which the least number of 13 states have pre-published draught rules.
The Code on Wages, which is pre-published by 24 states/UTs, receives the most draught notifications, followed by The Industrial Relations Code (which is pre-published by 20 states) and The Code on Social Security (which is pre-published by 18 states).