New Labour Law: Workers could get paid for unused leaves in same year! Check details

The new wage code is all set to be implemented from July 1, 2022.

New Delhi: The new wage code that is all set to be implemented from July 1, 2022, will impact employees' working hours, salary restructuring, PF contribution, gratuity aspect, and encashing of Earned Leaves, among other things. For instance, one of the major changes coming next months is related to the encashment of leaves of the workers. According to the new wage rule, employees will be able to encash the leaves without waiting for the financial year to end. 

With the new wage code, the Central government has made an attempt to enforce leave provisions across all sectors. The government has tweaked rules related to how many leaves can be carried forwarded next year, providing a chance to employees to get encashment for the unused leaves in the same year.

For example, if an employee has 45 days of leave at the end of the calendar year, an employer will be required to pay 15-day leave encashment. The remaining 30 days of leave will be carried forward to the following calendar year. 

Currently, 23 states have pre-published draft rules on these laws, The Centre had completed the process of finalising rules on these codes in February 2021. On August 8, 2019, the central government notified four labour codes: the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020, and the Occupational Safety, Health, and Working Conditions Code, 2020. Because labour law is a concurrent subject, the Centre wants the states to implement it all at once, as previously reported. 

Meanwhile, experts believe that the new rules will have an impact on employee working hours, with some media reports claiming that employees will be allowed a four-day workweek but will have to work for 12 hours on those four days. The labour ministry appears to have stated unequivocally that a 48-hour weekly work requirement is required.