A Step towards Employee Wealth and Health

Dr. K.A Guha selvi January 21, 2022

A major change in the Labor Law to be slated from October 01, 2021 is expected to bring about a sea change in the livelihood of workforce. An effort finalized by the Central Government to ease the burden of the workforce. The amendment is the result of researches carried out around the globe to determine the effects of these changes over the individual productivity of employees.

With the new Labor Law in place the Government is all set to include the 44 Central Laws in to 4 Board Labor Code ie., Code on Wages, Industrial Relations Code, Occupational Safety, Health and Working Conditions and Social Security Code. All the four codes had been passed in both the houses of Parliament and received the President’s nod.

Major changes observed:

Bringing down 5 working days to 4 without compromising 40 hours of work per week. If an employee can work for 8 hours/week it is 6 working days but 12 hrs/day make it to 4 days/week. A practice that has been tested in many countries and found to be productive. Trials of a four-day week in Iceland were an "overwhelming success" and led to many workers moving to shorter hours, researchers have said. The trials led unions to renegotiate working patterns, and now 86% of Iceland's workforce have either moved to shorter hours for the same pay, or will gain the right to, the researchers said. It will be implemented in industries wherever appropriate.
The next impact of the Labour Law would be a reduction in the Take Home Pay owing to the fact that it paves way to increase the contributions towards EPF and Pension Schemes.
The New Wages Code ensures that 50% of the Employees CTC is the Basic Pay while the remaining 50% include other allowances accounting to HRA Overtime Pay etc.,
Gratuity is to be calculated on a larger Salary Base including Basic Pay and Other Allowances like special allowance on Wages. This inturn increases The Gratuity cost to Companies.
Even a 15 Minutes of Overtime will have to be accounted and Overtime Payment has to be credited to the Employees.
While the Gig and even the Platform Workers have been sheltered by the Social Security Code. Universalization of the Minimum wages has been made possible through Wage Code. Threshold of 100 has been increased to 300 for companies resorting to lay-off, closure and retrenchment without government’s permission by Industrial Relations Code.

A measure with a step ahead to make sure that the stress and exhaustion felt by the work force is reduced thereby improving the health, wellbeing and work -life balance enabling more time for family life, engaging in hobbies and sharing of responsibilities.