Time for the workforce to brace for the new labour law. While the working hours have been increased from 9 to 12, the good news is that any extra work that takes the employees 15 to 30 minutes will be considered as overtime of 30 minutes. The basic salary will comprise at least 50 per cent of the total salary, but the non-perks portion of the salary will be less than 50 per cent of the total salary.
Another benefit that comes with the increase in basic is that the Provident Fund (PF) of workers will be more, leading to lesser pay in hand. That means, workers will have more in their kitty post retirement. The gratuity of employees will also go up. Increased PF and gratuity amounts will mean increased cost to company. Employers will need to contribute more towards the PF of employees. Those with high salaries will witness the most changes in pay structure and face maximum impact.
Currently, 30 minutes or less of extra work is not considered as overtime. However, henceforth, any extra work that takes between 15 to 30 minutes will have to be compensated for as overtime of half an hour. Also, no employees should be made to work for five hours at a stretch, without a break. It is mandated that employees be given a 30-minute break after every five hours.
The implementation of the new labour codes was delayed because of the uncertainties brought about by the pandemic, and because many states failed to finalise their rules under the Code of Wages 2019. This gave employers time to realign the compensation structure of the employees.