New Wage Code discussed at Labour Ministry meeting

Salary structure will be discussed again with the states this week


The Ministry of Labour called an important meeting with industry to discuss what the salary and allowance structure will be under the New Wage Code, on 22 August, 2022.

Whether allowance can or cannot be over 50 per cent in the salary needs to be clarified before implementation of the Wage Code.

If allowance cannot exceed 50 per cent, then the take-home salary will be less, while the investment in provident fund will go up.

Since burden is bound to increase immediately due to the new wage code, at least two months have been sought for implementation.

And since the Centre wishes to see the new code implemented across the country at the same time, the state will also be called for a meeting this week.

Not only working hours, but the amount of provident fund contribution, the salary structure and encashment of leaves among other points need to be discussed.

About 23 states have already rolled out the draft rules based on these laws.

Among other rules, the basic salary will be half of the gross salary. That means, employees can look forward to a higher gratuity amount once the new wage laws come into effect. The PF contribution will increase from the side of the employer as well as the employee. That means, in-hand salary will reduce.

Once implemented, employees will not be allowed to work for over 48 hours in a week. They will work for 12 hours a day for four days in a week or eight hours a day for six days in a week.

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