Last updated on June 6th, 2023 at 01:19 pm
Employment laws of INDIA 2023
The Central Government of India has passed four new labour codes to reform existing labour laws and establish rules and regulations governing employee-employer relations. A total of 29 labour laws which have remained unchanged since Independence will now be codified into the four new labour codes, namely Industrial Relations Code, Code on Wages, Occupational Safety, Health and Working Conditions Code, and Social Security Code. The new reforms will directly affect the salaries, provident funds, and gratuities of central government workers. It will affect the salary structure and tax liability of the private working class in the whole of India.
The Minimum Wages Code
Of the 29 existing codes, 4 have been clubbed under the Minimum Wages Code to give workers the right to minimum wages for the first time.
Key Highlights of Minimum Wages Code
Occupational Safety, Health and Working Conditions Code
The Occupational, Safety, Health and Working Conditions Code, 2020 aims to provide a safe working environment for workers. It amalgamates 13 labour laws and ensures occupational health and safety at the workplace.
Key Highlights of the OSH Code
The IR Code, 2020
The Industrial Relations Code (IR Code, 2020) subsumes 3 labour codes and safeguards trade unions and workers’ interests. It also ensures that no disputes between workers and industrial units arise in the future.
9 pre-existing labour codes have been combined to constitute the Social Security Code, 2020. This code will provide access to various security schemes like pension, maternity benefit, gratuity, insurance and so on.
Most countries have a nation-wide minimum wage that all workers must be paid. While India has no national minimum wage, minimum wages may be set by state or sector of industry.
The government clarified that 48 hours are the maximum time limit for the work week, and employers have the flexibility to choose this period of work and offer it in four days, five days, or a six-day week-long schedule. According to the new laws on labour, the working hours for a day are 12 hours, while the weekly hours of work are 48 hours. The overtime has increased from 50 to 125 hours per quarter across different sectors.
An employee’s base salary will be 50% of their gross salary. In addition, the PF contributions of the employer and employee will rise, while the take-home pay will be lower, especially for employees working in the private sector. The employer will pay 12% of the salary towards the EPF, while the employee will contribute 8.33% of the salary. Earlier, the employer was paying 12% of the salary towards EPF and the employee contributed 8%.
India’s national government guarantees employees with at least 12 days of paid sick leave (or casual leave) per year. Employees are required to provide a medical certificate if the leave exceeds two or three days. Sick leave cannot be carried over into the next year or paid at the termination.