The Code Of Wages 2020 will enforced and implement from 1st April 2021. This will redefine the labour laws and life of working professional in India. There will be a big change in their gratuity, PF and working hours from 1st April. Employees Gratuity and Provident Fund (PF) contribution will increase with this new law. The net take home salary for employees will also decrease.
It means employees will get less salary every-month due to these new Code Of Wages 2020. Even the balance sheets of companies will get affected. These rules will be enforced from 1st April this year. The Code on Wages 2020 Bill passed by the Modi government in Parliament last year. This will definitely increase the earning for government but employees and employer may not get any benefit.
How the salary structure will redefine with this new Code Of Wages 2020
The new Code Of Wages 2020 will redefine the salary structure for the employees working with companies. Now employees has to keep allowance more tea the 50% of the total CTC (Cost To Company). This Code Of Wages 2020 will completely redefine the labour laws in India. Since the freedom in last 73 years, Indian has not seen much reform in our labour laws. The government claims that it will be beneficial for both employers and workers. But labour experts differ to government view and say companies will more exploit to employees after this new rule.
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The new salary structure will force employees to contribute more for PF and gratuity every month. They will also force to accept and declare non allowance portion more than base salary of 50%. According to the new rule, the basic salary should be 50% or more of the total salary. This may attract more taxes on the non allowance component and reduce the take home salary for the employee. The companies will also force to pay more money for the employees PF and gratuity.
Government proposed 12 Hr working for the employees instead of current 8 Hrs
Modi government has proposed 12 hours of work for the employees. It mean employer will force employee to work for 12 hrs in same or less salary. Although employers may not be allowed to take more than 5 Hrs continuous job from the employee in single stretch. Employee has to take minimum 30 minute break in each 5 hrs stretch as per new Code Of Wages 2020 rule. New rule may benefit employers but definitely it will not benefit to the employees.
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The new law also define the rule for overtime for the employees. Now 15-30 minutes work also calculated as 30 minute overtime for the employees. As per earlier rule less than 30 minute work was not considered as over time for the employees. The rule of overtime may not help the employees because employer will ask employee to work for 12 hrs as per new rule. The employee will not be productive for over time after 12 Hrs daily work.
Employee will get ore money on the time of his retirement as per new rule
Increase in contribution to PF and Gratuity and PF will increase retirement corpus of employees. This will make it easier for people to live a pleasant life after retirement. Although employee has to work more and get less money during his employment due to this Code Of Wages 2020 rule. The salary structure of high-paid officers will undergo the biggest change and they will be the most affected due to this.
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The companies also not very happy because they are forced for higher PF and gratuity contribution due to this new rule. This will directly impact on their balance shree and reduce profitability. The companies will also try to find a way to get more work from employee due to this higher contribution to PF and graduate. Companies will also try to keep low cost resource to save their money after this rule.
Who has benefited with this new Code Of Wages 2020 rule
As per expert only government has benefited with this new Code Of Wages 2020 rule. Now government will get larger shared from employees and employees on the name of PF and gratuity. The government will also collect higher taxes on non allowance money due to this new rule. Now employees will get less opportunity to save taxes in thir salary component.
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Many believe that this rule will only benefit certain corporate who wish to pay less to their employees and want to take more work from them. This will also increase the exploitation from employers for 12 Hrs working rule. Now employers will expect employees to work for 12 Hrs in same salary and if employee refuse them they will through them out and higher a low cost resource.
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