Employees’ provident funds, payroll and working hours in India are expected to change from July 1. These changes will take place as a result of the enactment of the new Indian Labor Welfare Acts on July 1.
This change is said to lead to major changes in working hours extension – higher deposit funds – lower pay available. It is expected that some states and union territories will enact separate labor laws in protest of the new labor laws to be introduced by the federal government. Currently, Uttarakhand, Uttar Pradesh, Madhya Pradesh, Chhattisgarh, Arunachal Pradesh, Haryana, Jharkhand, Punjab, Manipur, Bihar, Himachal Pradesh and the Union Territory of Jammu and Kashmir have adopted the draft policy.
Experts say that even if parliament passes the law, states may declare rules for themselves under the new codes, as labor welfare laws are an integral part of the constitutional list. Under the new law the basic one-day working day may be increased from 8-9 hours to 12 hours. For those who work long hours like that, the weekend is given three days a week.
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Employees’ hands-on pay could be significantly reduced, as under the new pay index there will be at least 50 percent of the total monthly base salary. This is especially said to be the case for those working in private companies. At the same time, the deposit fund share of employees and employers may rise as a result. There will also be changes in the rules regarding leave taken by the employee during working hours. Accordingly, relaxations are to be made to add the remaining leave in one year to the next working year and to get more leave.
The rule that new employees can take leave only if they have worked 180 days in a year has been changed and it is to be amended to 240 days. Nonetheless it is said that these rules are not mandatory and can be implemented flexibly between the company and the employees. The federal government says the new labor laws will boost investment and employment in the country.