Four labor laws will be enacted soon

Governments and companies are busy preparing new laws

The in-hand salary of the employees will decrease while the amount of employee and company contribution in PF will increase

New Delhi: Four Labor Codes are likely to be implemented in the next few months. The central government is preparing to implement these four labor laws. The implementation of this code will reduce the in-hand wages of the employees. At the same time, companies will have to contribute more to the employees' PF fund.

The implementation of these laws will lead to a major change in the calculation of basic pay, allowances and PF contributions of employees. These four labor laws include the Wages / Labor Code, the Code on Industrial Relations, the Code on Work-Related Safety, the Code on Health and Workplace Employment, and the Social and Occupational Security Code.

According to sources, the Ministry of Labor had planned to implement these laws from April 1, 2021. However for some reason the implementation of these labor laws was avoided. This has given companies more time to enforce these labor laws.

Many states have not made rules under these four labor laws. While some states have started the process of making these rules. The Central Government is awaiting the preparation of the State Governments in respect of these laws.

According to the new Wage Code, all allowances should not exceed 50 per cent of the total salary. Due to which the basic of the employee will not be less than 50% of the total salary. The contribution of the employee and the company to the PF will increase. At the same time, the amount of graduation will also increase. That means employee savings will increase. However the net salary of the employees will go down.