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The Union government has made significant changes to labour laws by combining 29 current regulations into four new codes that will begin on November 21. The new Labour Codes consist of the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020, and the Occupational Safety, Health and Working Conditions Code, 2020. This change is part of a larger plan to update India's labour system, making it easier to do business and protecting workers' rights. If you have a full-time job, a contract position, work part-time, or earn money through online platforms, these updates might affect your pay, job conditions, benefits, and rights. Below are some important changes:
Minimum Wages Increased: All workers, no matter their job type (formal or informal) or how much they earn, now have a legal right to minimum wages, with a national "floor wage" determined by the central government.
Updated Wage Definition and Take-Home Income: A new definition of "wages" states that basic salary must be at least 50% of total pay. While this may lower current take-home pay for some, it will increase contributions to social security benefits like Provident Fund (PF) and gratuity, improving financial security for retirement in the long run.
Social Security for Gig Workers: For the first time, gig and platform workers are included in social security benefits, with companies required to give a portion of their yearly earnings to a special fund for benefits like life and disability insurance, and health coverage.
Easier Gratuity Access: The time needed to qualify for gratuity for fixed-term workers has been shortened from five years of continuous service to just one year, providing better financial assurance. Gratuity is a lump-sum payment from employers to recognize long-term service.
Required Appointment Letters: Employers must now provide formal appointment letters to all new employees, including those in informal sectors. This letter serves as proof of employment, salary, and social security benefits, adding to transparency and job security. This rule applies even in informal or gig jobs where these documents were often absent.
Double Pay for Overtime: Workers who put in extra hours beyond the standard working time must be paid at least double their normal wage.
More Leave Time: The requirement for annual paid leave has been changed from 240 days of work to 180 days a year, allowing new employees to take leave benefits sooner.
Women Allowed to Work Night Shifts: Discrimination based on gender in wages is banned. Women can now work night shifts in all workplaces (before 6 AM and after 7 PM), provided they agree and their employers ensure safety measures are in place.
Remote Work Options: Working from home will be allowed in service jobs if both parties agree, offering more flexibility.
Free Yearly Health Screenings: Companies are obligated to offer complimentary yearly health assessments or tests for all workers over 40 years old, encouraging health management among employees.
On-Time Salary Payments: Employers are legally bound to disburse salaries within a certain period (for example, within 7 days at the beginning of the next month for monthly salaries, or within 2 workdays after an employee leaves), which supports financial security for staff.
Travel-Related Accidents Included: Mishaps that happen while going to and from work are now considered work-related, making them eligible for compensation.
