Big news! New law will come into effect from July 1 – working hours will increase! salary will be less

New Delhi: The new introduction of the new labour number may reduce the number of working days in a week, but the daily working hours may increase as a result. The in-hand salary of employees could undergo a major change as the government is in the process of implementing new labor rules from July 2022.

The center introduced a set of four new labor codes that could come into effect from July 1. There has been no official announcement yet on when the new codes will be implemented.

It is worth mentioning here that some states haven’t framed the rules under all four labour codes yet and only 23 states and UTs have released the draft rules under the Wage Act, Minister of State for Labor and Employment Rameshwar Telly said in a written reply to Lok Sabha.

So what changes when the new code comes into effect?

4-day work week

Employees rooting for less number of working days in a week may have reason to cheer, as an employer may allow their employees to work four days instead of five per week. Too good to be true? Well, an employee may choose to work 4 days a week, but they will witness a notable increase in their work hours.

Working hours

The number of working hours will increase accordingly if the employee works for a lesser number in a week. The new wage code mandates 48 working hours per week. Therefore, the number of daily working hours will see a steep increase.

Currently, employees who work eight or nine hours per day will need to increase this shift to 12 hours if they want to choose the 4-day work week. This will be applicable to every industries.

PF contribution and Gratuity

Under the new labor law, an employee's provident fund contribution will increase. The new rules state that an employee's basic salary must be at least 50 percent of the total monthly salary, which increases the contribution of employees and employers in PF.

Therefore, this will hike the retirement corpus and gratuity amount of the worker.

Take-home salary 

As a result of the increase in the PF contribution, the employee's net salary will also be affected and might see a reduction.

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