New Labour Law In India
New Labour Law in India: Key Changes and What They Mean for You
In this post, we will discuss India’s new labour laws and how they affect working hours, compensation, and employee benefits. These changes are intended to protect workers’ rights and improve working conditions. Continue reading to learn about the changes and what they include for firms and employees.
Let’s look at each section in detail:
What is labour law?
Labour law, commonly known as employment law, refers to the rights, rules, and regulations that define the relationships between employees, employers, trade unions, employing corporations, and governments. Each individual’s laws establish the rights of workers or contractors at work. It is the set of social norms that define the minimum socially acceptable working conditions for employees and contractors.
What are the Labour Laws, Employment and Regulations in India?
1. Contribution towards PF
The contribution of PF is divided into three parts – employer contribution and employee contribution, which is split into PF and Pension.
So, an employee’s basic salary will be 50% of their gross salary, and the contribution employer and employee towards the Provident fund will be increased, whether take-home will be decreased.
2. Payment of overtime
If an employee completes 8 hours of work but still works over 15 minutes, then it will be subject to employee overtime payment, and companies have to pay overtime to the employee.
3. 50% of employee’s CTC
According to new labour law, employers must ensure that 50% of employees’ CTC is basic pay (can be Basic + DA component). The remaining 50% will be allocated to other allowances, such as travel allowances, HRA, overtime, etc. If a company is paying more than 50% for exemptions, allowances, and other expenses, it will be the additional amount.
4. Gratuity cost
Based on salary, the new wage code will calculate the number of gratuities that will consist of the basic pay and allowances, such as special allowances. That will increase the gratuity amount for business. So, there is a limit to the maximum of basic income to 50% of gross pay, increasing the gratuity amount the employee receives.
Overview of the Four New Labor Codes
The Ministry of Labour and Employment has implemented a number of changes aimed at raising workers’ living standards, with benefits to both organised and unorganised sectors. These reforms benefit workers while also making it easier to run business, creating jobs, and raising productivity. All employees will now have access to benefits such as the Employee Provident Fund (EPF), the Employee Pension Scheme (EPS), and full medical coverage through employee insurance.
1.Code on Wages, 2019
- Wants to regulate wages and bonus payments for all employment in any organised and unorganised sector.
- Check minimum wages at every interval of 5 years.
- Universal Declaration for the timely payment of wages to all workers.
- The central government has confirmed the provision of National floor wages.
- Four Labour acts, namely, The Minimum Wages Act,1948; The Payment of Wages Act,1936; The Payment of Bonus Act, 1936 and the Equal Remuneration Act, 1976.
- The fixation of minimum wages became easy for the categories of skill level, demographic and geographical area.
- The Wages Act payment has increased the remuneration level from RS.18,000 to RS.24,000.
- Provision to provide Equal remuneration for female and male workers.
2.Industrial Relations Code, 2020
- If a worker loses his job, in that case, the worker will get the benefit under Atal Bimit Vyakti Kalyan Yojana.
- The tribunal will provide faster justice to the worker.
- Under the scheme of Atal Bimit Vyakti Kalyan, any worker in the organised sector who loses his job gets financial benefits from the government. The benefits are acceptable to the workers covered under the ESI scheme. That is a kind of unemployment allowance.
- Provision of assault of offences.
- Worker issues would be resolved by the tribunal within a year.
- The industrial tribunal has two members. The individual can adjudge all issues except those related to reduction, strikes, etc.
- Wages of the 15 days for the re-skilling of the employee at the time of reduction will be credited directly to the workers’ bank account.
- Labour acts include the Industrial Dispute Act, 1947; The Trade Unions Act, 1926; The Industrial Employment Act, 1946.
- At the inception of industrial trade, a trade union with 51% of the votes would be accredited as a sole corporation union.
- ESIC is available for workers in all sectors, including unorganised sectors.
- The facilities of ESIC have increased from 566 districts to all 740 districts of the country.
- ESIC is also available for Gig workers who are engaged in new technology.
- Provision to provide EPFO to all employee sectors, including the self–sector.
- The Social Security funds are bestowed on unorganised sectors.
- The National database is for unorganised sectors through registration on the portal.
- Provision of Universal Account Number (UAN) for ESIC, EPFO, and Unorganised Sector workers.
- Aadhaar-based Universal Account Number (UAN) is used to ensure seamless portability.
- Labour Acts, Employees provident funds, Miscellaneous provision Act, Employees State Insurance Act, Payment of Gratuity Act, Maternity Benefit Act, Employee Compensation Act, Building and Other Construction Workers Welfare Cess Act.
4.Occupational Safety, Health, and Working Conditions Code, 2020
- Many provisions are there that will ease the lives of migrant workers.
- Women empowerment via the labour codes.
- Provide medical helpline numbers in every state for migrant worker grievances.
- Right to women workers to work in any organisation.
- The Women have the Right to work the night shift with their consent and ensure that the employer makes a proper arrangement to provide safety and security.
- Paid maternity leave for women workers from 12 to 26 weeks, and ensured a creche facility in all organisations of 50 or more workers.
- The national database is to be created for migrant workers.
- A travelling allowance is provided for the migrant worker.
- Provision for mandatory, free annual health check-ups of workers to be provided by the employers.
- An appointment letter to the workers has been compulsory.
- Provision to provide Cess funds to the construction workers.
- Under the “One Nation – One Ration Card”, Migrant workers will get ration facilities in the state.
- Under the code, the workers can register themselves as a migrant worker on the National portal under the Atma Nirbhar.
- Labour Acts relating to Factories, Mines, Dock, Construction Workers, Plantation, Motor Transport, Beedi and Cigar, Contact Labour & Interstate Migrant Workers.
Key points of new labour law in India
- Employees will be allowed three weeks of leave under particular conditions based on their working hours. Those who work 8 hours per day are eligible for one week of vacation, whereas those who work 12 hours per day can take three weeks off. Employees who work 9 hours every day are allowed two weeks of leave.
- India’s new labour laws will make major changes to ultimate settlement standards. Employees leaving the country will have their final payment completed within two days of their departure date.
- Female employees can now take advantage of an extended maternity leave of 26 weeks. Also, employers must first obtain their consent if they are working night shifts. Female employees working at night must have enough security and access to enough facilities.
- Compensation structures will also change. Basic pay components will rise, causing Provident Fund (PF) contributions to rise in parallel. As a result, while the PF amount grows, take-home pay may decrease slightly.
- Workers will be entitled to leave after 180 days of service, as opposed to the minimum of 244 days. In India, full and final settlements must be made within 45 days after an employee resigns from the organisation.
Conclusion
India’s new employment and labour laws now focus on workers’ welfare, often at the company’s expense. It remains to be seen how state governments will adapt these laws to create a fairer balance between employers and employees.
We have reached the end of this post. Please post your questions in the comments section below.
FAQs
1.What are the regular working hours in India?
Ans: Regular working hours in India usually are 9am to 6pm, which equals an 8-hour workday. Actual hours may vary depending on industry standards, job roles, and corporate policies.
2.What are the IT working hours in India?
Ans: Working hours in India’s IT sector might extend beyond 9 a.m. to 6 p.m., with flexible schedules and additional hours based on project demands and deadlines.
3.Is it legal to work for 12 hours in India?
Ans: In some cases, a 12-hour workday may be permissible, provided that labour rules and regulations in India are followed. However, following legal obligations such as overtime compensation and employee permission is essential.
4.Does an 8-hour workday in India include lunch?
Ans: The usual 8-hour workday in India does not include lunch breaks. Lunch breaks are often taken separately and are not considered part of the official working hours in India. Employees are entitled to a defined meal break under Indian labour regulations and corporate policy.
3.Code on Social Security, 2020