INDIA NEW WAGE CODE 2022

Описание: INDIA NEW WAGE CODE 2022 INFOCAST

India's new labour regulations may be enforced next fiscal year, with lower take-home pay and a likely 4-day work week.
The four labour codes on wages, social security, industrial relations and occupation safety, health and working conditions are likely to be implemented by the next financial year, news agency PTI reported citing a senior government official.

The labour codes were supposed to go into effect in April of this year, but because labour is a concurrent subject, both the Centre and the states must issue rules under these four codes in order for them to become law.

Many states are in the process of finalizing draft rules in this regard.

If enforced, the four standards will have a significant impact on how industrial companies treat their employees, as well as their working hours, take-home pay, and other rights.

When the wage code is implemented, for example, the way employees' basic salary and provident fund are computed will alter significantly.

A fundamental modification in the definition of "wage" would have an impact on take-home pay while also increasing retirement savings—a move that some firms oppose because it might raise employee costs.

Employers have previously split earnings into a variety of allowances in order to keep basic wages low and cut provident fund and income tax expenditures.

The new wage code mandates that provident fund contributions be made at a rate of 50% of gross compensation.

The four labour laws are anticipated to be approved in the next fiscal year, 2022-23, because a large majority of states have finalised draught rules.

In February 2021, the Centre completed the process of finalising the draught rules for these codes.

However, because labour is a concurrent subject, the Centre wants the states to implement these as well in one go," the official explained.

The four labour codes are expected to bring about significant changes that will impact both businesses and workers.

While employers would have more flexibility in implementing short-term work contracts, and industrial strikes would be more difficult, a new national wage floor could benefit workers, in addition to providing a new social security net for informal and gig workers.

The new labour code would also make it easier to do business by allowing companies with up to 300 employees to proceed with layoffs, retrenchment, and closure without seeking government approval.

At the moment, all businesses with fewer than 100 employees are exempt from government approval for layoffs, retrenchment, and closure.

Following the implementation of new codes, employees in India may be able to enjoy a four-day work week, as opposed to the current five-day workweek.

Employees must still meet the 48-hour weekly work requirement, which equates to 12 working hours per day in this scenario.

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