Employment and Labour laws

23 states, like Uttarakhand, Chhattisgarh, Odisha, Arunachal Pradesh, Uttar Pradesh, Madhya Pradesh, Haryana, Jharkhand, Himachal Pradesh, Punjab, Manipur, Bihar, and the UT of Jammu and Kashmir, have already implemented regulations under the labour laws. 

The critical points of the new labour laws and employment in India are: 

• Employees can take a three-week vacation. One week off will be given to those employed in 8-hour shifts, while those who work 12 hours are entitled to three weeks, and those working 9 hours will get two weeks.
• There will be a complete overhaul of the rules on final payments. Professionals who leave the organisation must be dealt with within two days from the date of departure from the business. 
• Women employees will benefit from an increase in their maternity leave to 26 weeks. Working the night shift must be approved by female employees. Security and facilities must be provided in line with the new codes. 
• The salary structure will be revised, with the basic salary component increasing. The provident fund calculations based on the basic salary will be increased, resulting in a decrease in cash salary. 

As per the new regulations, workers will get a vacation every 180 days instead of 244 per the earlier rules. Additionally, complete and final payments must be made within 45 days of the close of an organisation.

In India, several labour laws, employment regulations, and rules regulate employees’ rights and freedoms. 

These laws include the Payment of Gratuity Act of 1972, the Employees’ Provident Funds & Miscellaneous Provisions Act of 1952, the Minimum Wages Act of 1948, and the Factories Act of 1948, among others. These laws ensure employers comply with the legal requirements concerning wages, overtime, gratuity, and other benefits. 

Under the new labour laws, companies must pay gratuity at a rate higher than the previous one. This means the maximum basic pay should be at most 50% of the Cost to the Company (CTC). 

The new wage code will calculate the number of gratuities based on the salary base, which comprises basic pay and allowances such as a special wage allowance. This will likely increase the Cost of compensation for businesses. 

The new laws stipulate that employees’ basic pay should be at least 50% of their CTC. This means the remaining 50% includes other allowances such as overtime and house rent. Companies must also pay overtime to their employees for any hours worked beyond 15 minutes. The new labour laws will also increase the ratio between the take-home pay and the employer and employee’s contribution to the Provident Fund. 

An employee’s base salary will now be 50% of their gross salary, and the PF contributions of the employer and employee will increase while the take-home pay will reduce. The maximum working hours for a day have been set to 12 hours, while the weekly work hours are 48 hours. The overtime has increased from 50 to 125 hours per quarter across different sectors. Moreover, employees now get an hour of leave for every 20 days of working instead of 45 days. This leave is available to new employees after the first 180 days of their employment contract.

Employment and labour laws are complex and ever-evolving, making it critical for employers and employees to stay informed and up-to-date on their rights and obligations. Our firm provides comprehensive employment and labour law services to employers and employees to ensure compliance with applicable laws, mitigate risk, and resolve disputes.

We understand the importance of staying informed and proactive regarding employment and labour law. Our attorneys are dedicated to providing personalised and practical solutions to help our clients navigate the complex legal landscape.