New Labour Law, Codes 2022: Key Changes, Working Hours, Salary, PF

The Union ministry of labour and employment is set to implement four labour codes to amalgamate 29 central laws related to labour laws. Factors like employee working hours and salary received by an employee will be changed under these norms. The new labour codes will make the employment scenario in India go through a paradigm change to adapt to the modern-day requirements.
The main objective of this amended labour law is to ensure the employees’ welfare and social security. The new labour laws are hoped to revamp the rules dictating the relationship between employees and employers.
Labour Minister Bhupender Yadav said the four codes might soon be implemented as around 90 percent of states have already come out with draft rules.

New Labour Law – Changes in Working Hours

According to the new labour laws, one major change may happen on workdays. Under the new rule, companies can make employees work for four days instead of five, and there will be three weeks offs. But in that case, the regular work hours can become 12 hours in a day from 9 hours at present. In all, the week’s total working hours will remain unchanged.

New Labour Codes – Final Settlement of Wages

It takes up to two months for a former employee to get his dues from a previous organization. But the new Regulation mandates the payment of wages to an ex-employee within two working days of their removal, dismissal, reduction, or resignation.

New Labour Codes – The Wage for New Joiners

For the new joiners, the law indicates that for monthly wage earners, the wages must be settled within seven days of the subsequent month and that the wage period cannot be more than a month.

New Labour Codes – Deductions on Wages

Organizations will have to ensure that deductions from the salary relate to specifically permissible deductions (such as contribution to Provident Fund, tax deduction at source (TDS), etc.) and that the total deduction in any month should not exceed 50% of wages. The salary structure of all employees will be changed. The basic salary component will be increased. 

Currently, the labour laws are controlled by multiple legislations. But the recent law will bring more useful and comprehensive coverage of workers’ social security benefits.
The Payment of Wages Act, 1936 governs the wage settlement timelines and applies only to workers with wages not exceeding Rs 24,000 per month.
However, the new law does not set salary limits and covers all employees, making this timeline universal.

You can also read: Inter-State Council

What is the objective of Labour Law?

The purpose of introducing the labor laws was to simplify and modernize labor regulations. While the Parliament passed the Code on Wages in August 2019, the other three labor legislations, namely, the Industrial Relations Code, 2020; the Occupational Safety, Health and Working Conditions Code, 2020; and the Code on Social Security, 2020, were passed by the Parliament in September 2020.