[India] New labour codes will rationalise 44 central labour laws

In India, the Narendra Modi government may come up with some alterations to the four labour codes passed in Parliament to ensure that the new rules are implemented across the country from October 1, Hindustan Times reports.

The four new codes on industrial relations, wages, social security and occupational health safety (OSH), and working conditions will rationalise 44 central labour laws, the government has said. According to reports, all four new codes will be implemented at once.

The existing provisions of the new rules will lead working hours for employees to be increased from nine to 12 hours, while the in-hand salary will also change. Under the new wage code, allowances have been capped at 50 per cent, which will lead to half of the monthly pay being calculated as basic wage. Provident fund (PF) contribution is calculated as a percentage of basic wage, which includes basic pay and dearness allowance. An increase in basic pay will result in an increase in the PF contribution, which will reduce the take-home pay for workers. In many cases, the PF liability for employers will also increase.

Many employers divide basic wages into numerous allowances to keep PF contributions and income tax outgoings low. Once implemented, employers will have to undertake restructuring exercises as per the new code on wages.

On February 9, Union Labour Secretary Apurva Chandra reportedly announced that the new code will allow organisations to let their employees work for four days instead of the currently mandated five if employees are working for 12 hours a day. The Centre has also proposed a provision for free medical check-ups for workers through the Employees State Insurance Corporation.

Additionally, the new industrial relation code will allow firms with up to 300 employees to pursue retrenching, closure, and lay-offs without permission from the government. The Centre government claims the move would “enhance” the ease of doing business.

In India, the Narendra Modi government may come up with some alterations to the four labour codes passed in Parliament to ensure that the new rules are implemented across the country from October 1, Hindustan Times reports.

The four new codes on industrial relations, wages, social security and occupational health safety (OSH), and working conditions will rationalise 44 central labour laws, the government has said. According to reports, all four new codes will be implemented at once.

The existing provisions of the new rules will lead working hours for employees to be increased from nine to 12 hours, while the in-hand salary will also change. Under the new wage code, allowances have been capped at 50 per cent, which will lead to half of the monthly pay being calculated as basic wage. Provident fund (PF) contribution is calculated as a percentage of basic wage, which includes basic pay and dearness allowance. An increase in basic pay will result in an increase in the PF contribution, which will reduce the take-home pay for workers. In many cases, the PF liability for employers will also increase.

Many employers divide basic wages into numerous allowances to keep PF contributions and income tax outgoings low. Once implemented, employers will have to undertake restructuring exercises as per the new code on wages.

On February 9, Union Labour Secretary Apurva Chandra reportedly announced that the new code will allow organisations to let their employees work for four days instead of the currently mandated five if employees are working for 12 hours a day. The Centre has also proposed a provision for free medical check-ups for workers through the Employees State Insurance Corporation.

Additionally, the new industrial relation code will allow firms with up to 300 employees to pursue retrenching, closure, and lay-offs without permission from the government. The Centre government claims the move would “enhance” the ease of doing business.