From April 1, 2021, there may be a big change in your gratuity, PF and work hours. The Modi government will change the rules such as working hours, overtime, leisure time and office canteen. Employees do not work more than 5 hours in a row, giving them a half-hour break in the meantime. In addition, employees receive an increase in gravity and provident fund (PF) material. At the same time, the money at hand (take home salary) is reduced. Companies’ balance sheets are also affected. This is due to a three-wage code bill passed in parliament last year (the Wage Code). These bills are likely to come into effect from April 1 of this year.

These changes are in salary

Under the new definition of wages, allowances will be 50 percent of the maximum wage. This means that the basic salary (basic salary and dearness allowance in government jobs) must be 50 percent or more of the total salary from April. Significantly, this is the first time in the country’s 73-year history that changes are being made to labor law. The government claims it will prove beneficial to employers and workers.

PF goes up even though the salary is low

Under the new draft rule, the base salary must be 50% or more of the total salary. This changes the pay structure of most employees, since the non-salary portion of the pay is usually less than 50 percent of the total wage. At the same time, the share of allowances in the total wage increases even more. Increasing base salary will also increase your PF. PF is based on basic salary. Increasing the base salary will increase PF, which means a reduction in take-home or on-hand pay.

Retirement Amounts Increase

Increasing the gratuity and PF contribution will increase the amount received after retirement. This will make life easier for people after retirement. The biggest change is the salary structure of the highest paid officers and thus they are greatly affected. Increasing PF and gratuity also increases the cost of companies. This is because they too need to contribute more to the PF. The balance sheet of companies is also affected by these issues.

The 12 hour work proposal, the new rules are for overtime

The new draft law proposes to increase the maximum working time to 12. The draft rules of the OSCH code also provide for adding 15 to 30 minutes of overtime by counting 30 minutes of overtime. Under the current rule, less than 30 minutes is not considered an overtime entitlement.

Employees do not work more than five hours

The draft rules prohibit any employee from working continuously for more than 5 hours. Instructions for giving employees half an hour rest after every five hours are included in the draft rules.

Employees must be given a half-hour break after every 5 hours, jobs will be 12 hours – rules change from April 1