new labor code effective date | New Labor Code Rules: May be huge increase in minimum basic salary of private sector employees

According to media reports, the Modi government can implement the new Labor Code Rules from October 1. Although this new labor code was to be implemented from July 1, there was a lack of preparation of the state governments. Therefore, the date of its implementation has been extended. When the new labor law is being implemented, the eyes of crores of employees are fixed across the country. After all, what effect is the New Testament going to have on his life? It is being said that according to the new rule, the basic salary of the employees can be increased from Rs 15,000 to Rs 21,000.

It may be noted that the labor unions had demanded that the minimum basic salary of the employees should be increased from Rs 15000 to Rs 21000. If this happens in the new labor law, then the salary of the employees will increase. According to the new draft rules, the basic salary should be 50% or more of the total salary. This will change the pay structure of most of the employees.

PF and gratuity money will increase, take home salary will be reduced

With the increase in basic salary, the amount deducted for PF and gratuity will also increase as the money going into it will be in proportion to the basic salary. Since the basic salary will increase, then the PF and gratuity money will also increase. If this happens, then the take home salary will be reduced but the PF and gratuity money received on retirement will increase. However, the labor unions were opposing this and after these new rules, they were demanding to increase the minimum basic wage of the employees to Rs 21000.

Changes in many rules related to salary

According to the labor ministry, the government wanted to notify the labor code rules on July 1, but some states sought time to implement these rules. So it was postponed till 1 October. Now the labor ministry and the central government want to notify the rules of the labor code by October 1. Parliament in August 2019 introduced three labor codes, industrial relations, safety of work, health and working conditions and social security. Changed the related rules. These rules were passed by Parliament on September 2020.

Benefit at the time of retirement

With the increase in contribution to gratuity and PF, the amount received after retirement will increase. With the increase in PF and gratuity, the cost of companies will also increase. Because they too will have to contribute more to the PF of the employees.