Significant changes to the current labour laws in India

Four new labour codes are being introduced to improve the working conditions of employees and enhance the ease of doing business in India. These labour codes aim to merge 44 existing labour laws regarding basic wage, social security, industrial relations, and the health and safety of employees. 

Till now, 23 states in India have published draft rules on these labour codes. Once changes have been implemented, the take-home pay of employees may reduce. However, components like gratuity and provident funds may rise. Furthermore, the new draft rules will also impact the working hours of employees. Some media reports, such as the Hindustan Times, state that there is a likelihood that employees in India may get to enjoy a four-day workweek after the implementation of the labour codes. However, employees will have to work for 12 hours for those four days as the 48-hour weekly work requirement will not be changed by the labour ministry. The overtime pay given to employees will also be twice the amount of the current salary. 

Beneficial provisions

The draft rules of the labour codes lay down many other beneficial provisions for the welfare of employees such as free annual health check-ups for employees, the establishment of a social security fund for workers in the unorganised sector, and the early settlement of severance pay after resignation. Retirement benefits for employees are also expected to rise after the implementation of these codes. 

The central government is yet to notify the date of implementation of these labour codes. However, as per different media reports, the codes are likely to be implemented from the beginning of July. It is important for organisations across the country to be aware of the changes being made as the codes could trigger significant financial impact, especially in terms of gratuity and fair work wages. 

The implementation of these labour codes will result in great benefits for employees that were not previously available. Take a look at the current labour laws in India.