• Source:JND

New Labour Codes From April 1: New labour codes are expected to be implemented in India starting April 1, 2026. This change is not just on paper, but will completely reset your in-hand salary, working hours, and retirement planning. The government has consolidated 44 old laws and divided them into four simple codes.

This leaves people confused and asking many questions. Core Integra MD, Mahesh Krishnamoorthy, answered 12 such questions to Jagran Business, clearing up any confusion.

Question 1: How Changes Will Come Into Effect With The Introduction Of New Labour Codes?

The labour laws currently in place in our country were decades old. The needs and working styles of today's generation (such as working from home or the gig economy) have completely changed. The new codes aim to improve both ease of doing business and ease of living. This is an effort to make everything digital and transparent. Now, the rules will be uniform across the country, reducing complexities for employees.

Question 2: Will My In-Hand Salary Be Reduced?

This is the biggest fear, but it's worth delving into. According to the new rules, your basic salary must be at least 50 per cent of your total salary (CTC).

-Effect: In companies where the basic was low and allowances were high, the basic will increase.

-The result: The increase in your basic salary will increase your PF and gratuity contributions. This may slightly reduce your monthly salary, but your long-term savings will be significantly strengthened.

Question 3: What Will The Working Hours Be? Will The Dream Of A 5-Day Work Day Come True?

Answer: The new code provides for a maximum work week of 48 hours. Companies can implement this in two ways:

-If you work 8 hours a day, then there will be 6 days of working.

-If the company has 12-hour shifts, you will have to work only 4 days a week and get 3 days off.

-This will entirely depend on the agreement between the employer and the employee, but flexibility has been provided in the rules.

Question 4: What Are The Rules Regarding Overtime? Will I Get Extra Pay?

The new labour code has made overtime rules very strict and transparent. If you work more than the stipulated hours, your company must pay you double your normal wage. Previously, the rules varied from state to state, but now efforts are being made to bring uniformity to them.

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Question 5: What About Leave Encashment?

This is a very positive change. The old laws lacked clarity on leave encashment. Now, the rules state that you can carry forward up to a certain limit of leave at the end of the year, but encashment of leave beyond that limit is mandatory. This means your hard-earned leave will no longer go to waste.

Question 6: What Is The Change In PF Contribution?

PF will now be based on your actual basic pay. The government has also provided an option - if you are young and want more cash on hand, you can contribute up to a minimum threshold of Rs 15,000. However, if you are 35-40 years old and want a larger retirement fund, you can contribute up to your entire basic salary. The choice is yours.

Question 7: What's New With Gratuity? Will It Still Be Available After One Year Of Service?

The rules remain the same for regular employees, but there is good news for those on fixed-term contracts (FTC). Previously, they did not receive gratuity, but now, even if they complete a one-year contract, they will be eligible for gratuity. Furthermore, the increase in basic salary will significantly increase your total gratuity amount.

Question 8: What's In It For Gig Workers Like Zomato-Swiggy?

For the first time, gig workers and platform workers have been included in Indian labour laws. A social security fund will be established for them. This means that these workers will now also be able to access health insurance and other social security schemes that were previously available only to office-goers.

Question 9: What Are The Night Shift And Safety Arrangements For Women?

Women are now working shoulder to shoulder with men in every field. The new code allows female employees to work night shifts if they wish. However, employers must make adequate arrangements for their safety, transportation, and lighting. Furthermore, regulations have been simplified to increase the participation of women and the third gender.

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Question 10: Will 'Crèche' Facility Be Available For Children?

Yes, this is a very practical change. Previously, it was difficult for companies to set up crèches, and it was also difficult for mothers to bring their children to the office. The new rules now offer the option of crèche allowance. The company can provide a fixed amount to employees so they can place their children in any crèche near their home.

Question 11: What Are The Changes In The Scope Of Health Insurance And ESIC?

ESIC calculations will now be based on wages (basic + DA) instead of gross salary. This will reduce employee premiums and increase coverage. There is also talk of raising the ESIC salary limit from Rs 21,000 to Rs 30,000. If this happens, a much larger population will benefit from government medical facilities.

Question 12: What Are The Advantages And Disadvantages Of The New Labour Codes?

It has both advantages and disadvantages:

-Benefits: The biggest benefits are transparency and retirement security. Gig workers have gained recognition, and opportunities for women have increased. Digitization will reduce paperwork.

-Disadvantages: Employers will face an immediate financial burden, as they will have to contribute more towards gratuity and pension payments. Meanwhile, employees' take-home pay may decline slightly.

These labour codes are a major step toward modernising India's work culture. While some adjustment will be required initially, in the long run, this is in the best interests of both employees and companies.


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