New Labour Code: From working hours to in-hand salary, these major changes are set to take place under the new Labour Code..

With the implementation of the new labor codes in India, significant changes are expected in employment, salaries, and work culture. A "4-day work, 3-day off" model may also be introduced in many companies. Under the new regulations, rules regarding basic salary, Provident Fund (PF), gratuity, and layoffs are set to change. This will impact the take-home salaries and employment terms of millions of private sector employees.

**The "4-Day Work, 3-Day Off" Model:** Under the new labor codes, employees can be required to work for a maximum of 48 hours per week. This implies that companies, if they choose to, can implement a 4-day workweek by scheduling 12-hour shifts daily. Consequently, employees could enjoy three consecutive days off. However, this will not be mandatory for all companies; in many sectors, the traditional 5- or 6-day workweek model may continue. (AI)

**Major Changes to Basic Salary:** According to the new regulations, it will be mandatory for an employee's basic salary to constitute at least 50 percent of their total Cost to Company (CTC). Currently, many companies keep the basic pay low while keeping allowances high to minimize the financial burden associated with PF and gratuity contributions. Once the new rules come into effect, companies may be required to restructure their salary frameworks. (AI)

**In-Hand Salary May Decrease:** An increase in basic salary will have a direct impact on PF deductions. This means that the actual "in-hand" salary received by employees each month may decrease slightly. However, in the long run, this will prove beneficial in terms of retirement savings, as a larger amount will be deposited into the Provident Fund. (AI)

**PF and Retirement Funds to Grow:** Following the implementation of the new labor codes, PF contributions from both the employee and the employer are expected to increase. This will significantly strengthen the employees' retirement corpus. Those with long tenures of service stand to benefit the most from this, as it will allow for the accumulation of a substantial retirement fund, compounded by interest over time. (AI)

**New Rules for Salary Disbursement:** Under the new regulations, the timely payment of salaries will be mandatory. Employees receiving a monthly salary must be paid by the 7th day of the following month. Furthermore, if an employee resigns or is terminated, the company is required to complete their final settlement within two working days. (AI) It will also be mandatory to pay double wages for overtime work. (AI)

**Grievance Committees to be Formed in Companies:** Companies with 20 or more employees will be required to establish a Grievance Redressal Committee. It will be mandatory to include female members in this committee. Employee grievances must be resolved within 30 days. Companies with more than 100 employees will also be permitted to form a Works Committee. (AI)

**Focus on the Safety of Women and Employees:** Under the new rules, women will be permitted to work night shifts across all sectors; however, companies must ensure their safety. Canteens will be mandatory in establishments with more than 100 employees. It will also be made mandatory to appoint Safety Officers at construction sites and in mines. Greater emphasis will also be placed on employee health check-ups and workplace safety. (AI)

**Emphasis on Bonuses and Equal Pay:** The new Labor Code makes it mandatory to pay equal wages to male and female employees for equal work. Additionally, it will be mandatory to provide bonuses to employees falling within a specified eligibility threshold. The minimum bonus can range from 8.33% to a maximum of 20%. (AI)

**Stricter Rules for Layoffs and Retrenchment:** If a company alters the terms and conditions of its employees' service, it must provide a 21-day prior notice. The government must be notified regarding the retrenchment of 50 to 299 employees. Government approval will be mandatory for the retrenchment of more than 300 employees. Compensation must also be provided to the affected employees. (AI)

**Simplified Gratuity Rules:** Fixed-term employees will become eligible for gratuity benefits after completing just one year of service. Currently, five years of service are required for regular employees. This change is expected to provide relief to contract and short-term employees. However, this change is also viewed as a factor that will increase additional costs for companies.

Disclaimer: This content has been sourced and edited from News18 Hindi. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.