New wage code latest update: Preparations are underway to implement the new wage code rule from the Ministry of Labor. With this, a change can be seen in the salary structure of the employed people.
New wage code can be implemented in the new financial year. It has not been officially announced yet. But, the work on the draft is almost complete. According to sources, the draft inputs of the state are being discussed. An important meeting is also to be held in the Ministry of Labor in mid-February regarding this. Some changes can also be made in the new labor law. The Final Draft Gineline can be issued by the Labor Ministry soon. There is a lot of confusion in the employed about it that it will cause damage. But, it has many advantages.
What is there in the new wage code or labor reform?
The most discussed in the New Wage Code is about the salary. According to the Act, the basic salary of an employee cannot be less than 50 percent of the cost of the company (CTC). At present, most companies keep the basic salary around 30 percent. In such a situation, all types of allowances are up to 70-75 percent.
But, 50 percent will have to be kept in the new rule. The share of basic salary will be 50 percent and the remaining 50 percent will be all kinds of allowances. In such a situation, after the implementation of the new wage code, there will be a reduction of 7-10 percent in the inhand salary. But, the benefits of the new wage code will also be available.
Contribution to PF-Gratuity will increase
Due to increase in Basic Pay, the PF of the employees will be deducted more, their take-home salary will be less, but the future will be more secure. This will give more benefit on their retirement, as their contribution to Provident Fund (PF) and Monthly Gratuity will increase.
Benefits of News Wage Code
1. With the implementation of the new wage code, the PF of the employees will be deducted more. More money will be deposited for future. You can use this amount anytime. After retirement, you will get a good pension and a big fund will be ready.
2. Contribution in gratuity will also increase. The employee will not have a problem with money in an emergency. One month gratuity can also be available.
3. Employees of the unorganized sector will get benefit because till now there is no fixed format for the salary of such people in many companies.
4. With the new wage code, there will be equality in the salary of the employees working in every industry and sector.
5. With the implementation of the new rule, people will invest more and the investment cycle will get a boost. Tax savings will also be more. However, its limit will be Rs 2.5 lakh for the time being.
EPF, holiday limit may increase
There is a demand of the union regarding annual holidays. Earned leave limit can be increased from 240 days to 300 days. Separate rules can also be made for the building and construction sector, beedi workers, journalists and people associated with the field of cinema. The eligibility of Employees Provident Fund Scheme (EPF) can be increased from Rs 15,000 per month to Rs 21,000.
What is the new wage code?
The central government has created 4 new codes by combining 29 central labor laws. These include Industrial Relations Code, Code on Occupational Safety, Health and Working Conditions Code (OSH), Social Security Code and Code on Wages. Some new concepts have been introduced in labor codes. But, the biggest change is the expansion of the definition of ‘wage’. The new labor code is aimed at consolidation. 50% of the salary will be directly included in the wages.