New Wage Code: The industry wants more clarity on the salary structure before the new law, in which items how much exemption can be given. A decision can be taken today on fixing this number and limit.
New Wage Code: The great churning is going on to implement the new labor law. The Ministry of Labor is going to have an important discussion with the industry today (August 22, 2022) on the wage code. In this, important decisions can be taken on implementing the new rules. After this, a meeting will be held with the states on August 24-25. The government wants to implement the new law simultaneously across the country. In the meeting of the Ministry with the industry, it can be agreed that not more than 50 percent allowance should be made in the salary.
If there is a consensus on this, then take home salary will be less and investment in Provident Fund (PF) will increase. The industry wants more clarity on the salary structure before the new law as to which items can be exempted. A decision can be taken in the meeting on fixing this number and limit. The industry has held a meeting with the Principal Labor Commissioner of 15 states regarding the new labor law.
What will happen after the Wage Code?
After agreeing on the provisions of the new wage code, only a maximum of 50 percent allowance can be made in the salary. The industry can agree on this in today’s meeting. The industry is ready to implement the new rules according to the wage code. The new rule will reduce the take home salary, but the contribution in PF will increase. Basic salary will increase.
What does the industry want
The industry believes that the structure of allowances should be clear before the new rules are implemented. A clear guideline should be issued on the number and limit of exemptions. Apart from this, the industry is demanding to do the calculation of grandfathering option and gratuity in the old fashioned way. At the same time, it has been requested not to implement it retrospectively. Industry believes that the new wage code is expected to increase the burden in the short term. Therefore, the industry should get 2-3 months to implement the new rules.
