Take-home pay, working hours may change from July 1st. Details here

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New labor law: How will you receive the salary, change in PF contribution from July 1

Salary in hand, contribution to the Employees Provident Fund and working hours could change significantly as the Center plans to implement new labor laws from July 1.

The newly prescribed wage codes provide for a series of changes, which will result in an increase in working hours, PF contributions and a decrease in wages on hand for employees.

The government is in the process of implementing the new labor codes as of July 1.

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However, a few states have not yet defined the rules under the four labor codes. Only 23 states and union territories (UTs) have published the draft rules under the Wages Code, State Minister for Labor and Employment Rameshwar Teli said in a written response to Lok Sabha.

According to the new laws, companies can increase working hours from 8-9 hours a day to 12 hours.

However, they will have to offer employees three weekly holidays.

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Thus, the working days in a week will be reduced to four days, but the total number of working hours in a week will not be affected. The new wage code imposes a total of working hours of 48 hours per week.

The take-home pay of employees will also change significantly since the base salary will be at least 50 percent of the gross monthly salary under the new wage code. It will also increase PF contributions paid by employees and employers.

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The salary in hand will be more affected for employees in the private sector.

Under the new labor legislation, the amount of pensions and bonuses will increase.

The four labor codes — wages, social security, industrial relations, occupational safety, health and working conditions — were created by subsuming 29 central labor laws.

Parliament passed the codes, but because labor is a subject in the concurrent list of the Constitution, states must notify the rules under the new codes.

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