New labour law News

The Modi government has consolidated 29 labour laws into four comprehensive Labour Codes. The four Labour Codes include 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.

The Code on Wages, 2019 redefines how “basic salary” is calculated for EPF, pension and gratuity. Under the new rules, wages include basic pay, dearness allowance and retaining allowance, which together must form at least 50 percent of total remuneration. Allowances such as HRA, bonus, travel, overtime, employer PF contributions and retirement benefits are excluded. If allowances exceed 50 percent, the excess must be added back to wages. In-kind benefits can count only up to 15 percent. The updated structure ensures fairer, more transparent salary calculations and leads to stronger retirement benefits for employees across sectors.  

The government will soon implement the new labor law. According to new labour law, the working hours of employees are going to be increased from 9 hours to 12 hours.