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Key changes in take-home salary, work hours, leaves from July 1. Check details here


In order to revamp the rules dictating the age-old relationship between employees and their employers, the Centre has released four new labour codes. The codes lay down a host of schemes, under which there will be significant changes in terms of an employee’s salary, PF contributions, work hours, working conditions, labour welfare, health and safety.

Here are the changes an employee can expect under the new labour codes:

Work hours and days off

As per the new labour laws, the daily working hours have been capped at 12 hours while the weekly working hours have been fixed at 48 hours. This means that the companies/factories can make it a four-day-work week by asking their employees work for 12 hours a day instead of eight, since work hours will not get reduced. Overtime has been increased from 50 hours to 125 hours in a quarter across industries. This will be applicable to every industry, but may change from state to state depending on the rules set by a particular state.

PF and salary structure

The new labour laws suggest that the basic salary of an employee will have to be at least 50% of the gross salary. As an effect, the employees will be making more contributions to their EPF accounts and gratuity deductions will also increase which will decrease take-home salaries of most employees. While this will mean that PF contributions of the employee and employer will increase, the take home salary will decrease for some employees, especially those working in private firms. The money received after retirement as well as the gratuity amount will also increase under the provisions of the new draft rules.

Number of leaves

The quantum of leaves in a year will remain the same but employees will now earn a leave for every 20 days of work instead of 45, which is a good news. Moreover, the new employees will be eligible to earn leaves after 180 days of employment instead of 240 days of work as is applicable now.

The government also wants to rationalise the leave an employee can avail during his or her tenure at a company. The policy of carrying forward a leave to the succeeding year and encashment of leaves are also being rationalised. The government is also recognising work from home structure in its draft model applicable to the service industry.

Uttar Pradesh, Madhya Pradesh, Chhattisgarh, Uttarakhand, Odisha, Arunachal Pradesh, Haryana, Jharkhand, Punjab, Manipur, Bihar, Himachal Pradesh and Union Territory of Jammu and Kashmir are among the states which have drafted rules under the labour laws.


47 Days ago