New Labour Law In India
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New Labour Law In India

Usually, every business needs to follow some rules and regulations so that they can secure their business and also can provide the rights of employees. In this post, we will discuss the following topics on new labour law in India. 

New labour law will bring a huge transformation in all sectors that will modify and affect payouts, such as social security, provisions of overtime, labour welfare, health, safety, working conditions and others.

What is labour law?

Labour law, also known as employment law, refers to the rights, rules and regulations between employee and employer, trade unions, employing entities, and the government. Every individual’s laws define the rights of employees or contractors at work. It is social norms for the minimum socially acceptable conditions under which employees or contractors are allowed to work.

What are the Labour Laws, Employment and Regulations in India?

  • Contribution towards PF 

The contribution of PF is divided into three parts – employer contribution and employee contribution which is split into PF and Pension.

So, an employee’s basic salary will be 50% of their gross salary, and the contribution employer and employee towards the Provident fund will be increased, whether take-home will be decreased.

  • Payment of overtime  

If an employee completes 8hr of their work but still works over 15 minutes, then it will be subject to employee overtime payment, and companies have to pay overtime to the employee.

  • 50% of employee’s CTC 

According to new labour law, employers must ensure that 50% of employees’ CTC is basic pay (can be Basic + DA component) and the remaining 50% will be other allowances, such as travel allowances, HRA, overtime and others. If a company is paying more than 50% in case of exemption, allowances and others, then it will be the additional amount.

  • Gratuity cost

Based on salary, the new wages code will calculate the number of gratuity that will consist of the basic pay and allowances, such as special allowances. That will increase the gratuity amount for business. So, there is a limit maximum of basic pay to 50% gross pay, which increases the gratuity amount that the employee receives.

New Labour codes –

The Ministry of labour and employment has taken several initiatives towards changing the standard of living of workers. That is the beneficial and extensive effect on workers and nation-building. These labour reforms will enhance ease of doing business, employment creation, and output workers will get increased,

These labour laws will be beneficial for both the organised and unorganised sectors. Now, (EPS)employment provident fund,(EPS) Employee pension scheme, and coverage of all types of medical benefits under employee’s insurance will be available to all workers.

  1. The code on wages, 2019
  2. The industrial relation code,2020
  3. The occupational safety, health and working conditions code, 2020.
  4. The code on social security, 2020

The code on wages, 2019 – workers will get the benefits. 

  • Wants to regulate wages and bonus payments for all employment in any organised and unorganised sector.
  • Check minimum wages at every interval of 5 years.
  • Universal Declaration for the timely payment of wages to all workers.
  • The central government has confirmed the provision of National floor wages.
  • Four Labour acts, namely, The Minimum Wages Act,1948; The Payment of Wages Act,1936; The Payment of Bonus Act; 1936 and Equal Remuneration Act, 1976.
  • The fixation of minimum wages became easy for the categories of skills level, demographic and geographical area.
  • Payment of wages act has increased the level of remuneration from RS.18,000 to RS.24,000.
  • Provision to provide Equal remuneration for female and male workers.

The industrial relation code, 2020 – 

  • If a worker loses his job, in that case, the worker will get the benefit under Atal Bimit Vyakti Kalyan Yojana.
  • The tribunal will provide faster justice to the worker.
  • Under the scheme of Atal Bimit Vyakti Kalyan, any worker in the organised sector who loses his job gets financial benefits from the government. The benefits are acceptable to the workers covered under the ESI scheme. That is a kind of unemployment allowance.
  • Provision of assault of offences.
  • Worker issues would be resolved by the tribunal within a year.
  • The industrial tribunal has two members. The individual can adjudge all issues except related to retrenchment, strike, etc.
  • Wages of the 15 days for the re-skilling of the employee at the time of retrenchment Wages will be credited directly to the bank account of workers.
  •  Labour acts, which are the Industrial Dispute Act, 1947; The Trade Unions Act, 1926; The Industrial Employment Act, 1946.
  • The inception of industrial trade, a trade union having 51% votes shall be accredited as a sole corporation union.

 The occupational safety health and wealth code, 2020 –

  • Many provisions are there which will ease the lives of migrant workers.
  • Women empowerment via the labour codes.
  • Provide medical helpline numbers in every state of migrant worker grievances.
  • Right to women workers to work in any organisation.
  • The Women have the Right to work the night shift with their consent and ensure that the employer makes a proper arrangement to provide safety and security.
  • Paid maternity leave for women workers from 12 to 26 weeks, and ensured a creche facility in all organisations of 50 or more workers.
  • The national database to be created for migrant workers.
  • Travelling allowance provided for the migrant worker.
  •  Provision for mandatory, free annual health check-ups of workers to be provided by the employers.
  • An appointment letter to the workers has been mandatory.
  • Provision to provide Cess funds to the construction workers.
  • Under the “One Nation – One Ration Card”,Migrant workers will get ration facilities in the state.
  • Under the code, the worker can register themselves as a migrant worker on the National portal under the Atma Nirbhar.
  • Labour Acts relating to Factories, Mines, Dock, Construction Workers, Plantation, Motor Transport, Beedi and Cigar, Contact Labour & Inter-state Migrant Workers.

The code on social security, 2020 – 

  • ESIC is available for workers of all sectors, along with unorganised sectors.
  • The Facilities of ESIC have been increased, from 566 districts to all 740 Districts of the Country.
  • ESIC is also available for Gig workers who are engaged in new technology.
  • Provision to provide EPFO to all sectors of employees including the self–sectors.
  • The Social security funds are bestowed for unorganised sectors.
  • The National database is for unorganised sectors through registration on the portal.
  • Provision of Universal Account Number (UAN) for ESIC, EPFO, and Unorganised Sector workers.
  • Aadhaar-based Universal Account Number (UAN) to assure seamless portability.
  • Labour Acts, Employees provident funds, Miscellaneous provision Act, Employees State Insurance Act, Payment of Gratuity Act, Maternity Benefit Act, Employee Compensation Act, Building and Other Construction Workers Welfare Cess Act. 

Key points of new labour law in India

  • As per the Payment of Gratuity Act 1972, more than 10 workers in private sectors are eligible to claim the gratuity benefits after 5 years of continuous service.
  • Employers need to take permission from female employees to work night shifts.
  • The Provision Fund will increase on the basis of Basic salary.
  • The structure of payment will change based on the new labour law.
  • Overtime will calculate on a daily basis or weekly.
  • An Employer can not take extra work from an employee without their consent.

This is the end of our discussion on labour law in India. Let’s know your other questions and opinions on this topic. Mention below the comment box.

Also,  you can go through the Labour law reforms.

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