More working hours, less take-home: New labour law from July 1?

CHENNAI: The Central government's new labour laws are likely to be implemented with effects from July 1, 2022. With this, there will be massive changes in the working factors in all industries and sectors. The regulations related to working hours of employees, contribution to provident fund and salary structures will undergo drastic changes.

However, there has been no official notification in this regard as of now. The new prescribed labour code will have implications on wages, social security (pension, gratuity), labour welfare, health, safety and working conditions (including that of women).

Reports suggest that so far 23 states and Union Territories have framed and published draft rules under the new labour laws. The state labour code and rules are framed based on the new Code on Wages 2019, and the Industrial Relations Code 2020, the Code on Social Security 2020 and the Occupational Safety, Health and Working Conditions Code 2020, all of which have been passed by the Parliament.

The working hours for employees in all sectors will undergo a drastic change. Presently, the working hours are based on the Factories Act, 1948 at the national level for workers in factories and other such workplaces.

As per the new labour laws, the daily working hours have been capped at 12 hours from 8-9 hours, while the weekly working hours is mandated at 48 hours. However, they will have to provide the employees three weekly offs, making it a four-day-work week. Overtime has been increased from 50 hours to 125 hours in a quarter across industries.

Another big change that is going to come under new labour law is the ratio of the take home salary and the employees and employer's contribution in Provident Fund. The basic salary of the employee will have to be 50% of the gross salary. The PF contributions of the employee and employer will increase, the take home salary will decrease, esspecially those working in private sectors.

The four labour codes of wages, social security, industrial relations, occupational safety, health and working conditions were created by absorbing 29 Central labour laws.

The Parliament has passed the codes, but as labour is a subject in the Concurrent List of the Constitution, the states need to notify the rules under the new codes.