A Long(er) Weekend, More Vacations – For Real? Here’s India’s New Labor Code

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Employees – there’s good news. Take-home salary, work hours, and a lot more will change- for good.

As per the new labour code of the central government implemented from July 1, companies can have 4 days working instead of 5 or 6. However, 4 days doesn’t mean fewer working hours. 

The new wage code mandates total working hours of 48 per week.

Essentially, a 4-day work week would mean 3 paid holidays.

No more waiting for F&Fs

Companies will have to clear all pending wages and salaries within the 2 days of employees’ exit as per their resignation date, layoff, or termination.

Currently, companies pay out or complete their employees’ dues in 45- 60 days, in some cases even 90 days, from the last working day. What a relief!

Work from home is here to stay? 

There’s no denying that we love the WFH culture. We’re praying – let it just stay! 

The new labour laws are drafted to help the employees maintain their work-life balance.

More $$$ in hand

The take-home salary for every month will change significantly because the basic salary will be at least 50% of the gross monthly salary. Well, the basic salary used to be just peanuts, agree?

This improvisation also helps employees to optimize their taxes.

Provident fund and gratuity

Take-home $$$ increase also means that there will be a substantial rise in gratuity and PF contribution of the employee. 

Time to plan more vacations!

Government office employees get to have 30 leaves a year, while those in defence get 60. In addition, employees can encash up to 300 holidays on carrying forward. The new laws are fighting to increase this number to 450.

Too long? Here’s a one-liner: New labour code implemented from July 1 to impact CTC, leaves, PF, gratuity, and affect tax outgo.




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