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The government is in the process of transforming the labour law framework in India.

The government is in the process of transforming the labour law framework in India with the introduction of four new labour codes. These labour codes will replace 29 current central labour laws. How would this impact salaried employees? What can salaried employees expect from these codes? Let’s have a look. The Code on Social Security, 2020 requires employee benefits such as gratuity to be calculated on ‘wages’ as defined under the codes. This was earlier calculated only on basic salary. This will mean a higher quantum of lump-sum gratuity pay-out to eligible employees. The Occupational Safety, Health and Working Conditions Code, 2020 (OSHWC Code) covers special provisions for working hours; overtime and leave for a certain category of employees, defined as ‘workers’ under the codes.

A normal working day will cover eight hours of work. State governments have been given authority to prescribe the weekly working hour limit.

A normal working day will cover eight hours of work. State governments have been given authority to prescribe the weekly working hour limit and the hours beyond which overtime will be payable. For every hour worked over such prescribed limits, ‘workers’ will be entitled to overtime pay at twice the rate of ‘wages’. These provisions apply to employers across sectors and even individuals in so-called white collared jobs if they fall within the definition of ‘workers’.

The OSHWC Code has specific provisions for earned leave and leaves encashment for workers. Workers will be eligible for one day of leave for every 20 days of work and can carry forward up to 30 earned leave to the succeeding calendar year. Workers will be eligible for leave encashment on their demand at the end of each calendar year. Where the total number of leave exceeds 30, workers will be eligible to encash such exceeded leave. All leave encashment for workers under labour codes. Whether annually or on termination of employment, is to be calculated based on the definition of ‘wages’.

By Ram

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