Global Employment Updates 2023: India

Last updated on June 6th, 2023 at 01:19 pm

Employment laws of INDIA 2023

An Overview

1. LABOUR CODES 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

• Minimum wages to be reviewed every 5 years.
• Timely payment of wages guaranteed for all workers.
• Equal wages for both male and female workers
• Provision of floor wage eliminates regional disparity in minimum wages.
• Minimum wages to be decided based on skill level and geographical area.
• Payment of Wages Act (in effect since 28 September 2017) has increased the wage ceiling from ₹18,000 to ₹24,000.
• Social, health, and wage security to over 50 crore workers in the organised and unorganised sectors.

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

• Inter-state migrant workers can register themselves on the national portal to create legal identities which will help them avail social security schemes and benefits.
• Employer-sponsored annual travelling allowance for inter-state migrant workers
• Mandatory and free annual health check-up sponsored by the employer.
• Building and construction workers migrating between states to receive a direct benefit from the building and other Construction Workers’ Cess fund
• Migrant worker in one state and their dependants in another to get ration facilities under the ‘One Nation-One Ration Card’ scheme.
• Dedicated helpline for addressing migrant workers’ grievances.
• Creation of a national inter-state migrant worker database
• One-day leave for every 20 days of work done — number of mandatory workdays slashed from 240 to 180 working days.
• Women workers can work at any establishment.
• Women workers can work at night with their consent and employers must make necessary arrangements for their safety and provide necessary facilities.
• Paid maternity leave for women workers, increased from 12 to 26 weeks.
• Establishments with 50 or more women workers to set up creche facility.

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.

Key Highlights of the IR Code

• Workers who lose their jobs to get an allowance under the Atal Bimit Vyakti Kalyan Yojna.
• Workers from organised sectors who have lost jobs to get unemployment allowance under the Atal Bimit Vyakti Kalyan Yojna.
• Retrenched workers to get 15 days’ wages credited to their bank accounts for re-skilling.
• Speedy justice and settlement of workers’ disputes (within a year) by a tribunal
• Two-member industrial tribunal for quick disposal of disputes and cases
• Trade union with 51% votes to be the negotiating party for workers
• A council of trade unions to be set up to negotiate with employers if no single trade union gets 51% votes

The Social Security Code

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.

Key Highlights of the Social Security Code

• Free treatment at ESIC-run dispensaries and hospitals through a small contribution
• Workers from unorganised sectors and all sectors get access to ESIC hospitals
• ESIC dispensaries, hospitals, and branches for all 740 districts in India
• ESIC benefit for workers engaged in hazardous work.
• Platform and gig workers in tech to get ESIC access.
• Establishments engaged in hazardous work to compulsorily register with ESIC.
• Plantation workers to get ESIC benefit.
• EPFO (PF) scheme extended to self-employed individuals and workers in both organised and unorganised sectors.
• Minimum service clause removed for payment of gratuity to fixed-term (contractual) employees
  Same social security benefits for fixed-term and full-time employees.
• Creation of national database of workers in the unorganised sector through registration on the e-shram portal.
• Employers with 20+ workers to report vacancies online.
• Unorganised sector workers to get Aadhaar-based UAN for ESIC and PF scheme benefits.

2. MINIMUM WAGE

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.

3. WORKING HOURS

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.

4. PROVIDENT CONTRIBUTIONS TO THE FUND

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%.

5. SICK PAY

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.