The new labour laws which were to be implemented on 1st July 2022 for all the corporates and organizations under the registration of the ministry of corporate affairs have been postponed as of now due to multiple states not agreeing on the terms. The new labour law will shrink working hours, and PF as well as the in-hand salary of employees in the process.
There are rumours surging in the corridors of corporates as well in the labour ministry on the latest new labour laws 2022 which are now slated to be effective on a later date due to the non-agreement of certain states.
The latest labour laws would be reducing the take-home salary of the employees by increasing the HRA as well as the PF categories of the salary structure. Apart from that, new labour laws 2022 will also extend working hours to 12 hours a day as per the reports.
The labour ministry is ready with the rules for the 4 codes and mentions them when some states will be ready for the guidelines applied in their domain. Jammu & Kashmir has notified the rules, while Uttar Pradesh, Bihar, Uttarakhand, and Madhya Pradesh have placed draft laws for two codes and Karnataka has prepared rules for one code.
One of the biggest impacts of the new labour law will be on the take-home salaries, which is expected to reduce, owing to the fact that the government is eyeing increasing contributions towards provident fund (PF) and other post-retirement schemes. The new laws are expected to come into play soon, which will force employers to modify their employee compensations.
As per the Wages Codes 2019, wages that are paid to an employee include the basic pay plus dearness allowance (DA) and retention payment. Therefore, other remunerations such as PF contributions, bonuses, pension, HRA, gratuity, overtime, etc. are not covered under the definition of wages.
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Basic Pay to be 50 Percent of CTC
The new wages code makes it compulsory for organisations to make sure that 50 per cent of employees’ CTC is basic pay, while the remaining 50 per cent comprises other employee allowances, including house rent, overtime, etc.
If the company pays any additional exemptions or allowances that exceed 50 per cent of the CTC, the same will be treated as remuneration to be added to the wages.
Gratuity Cost of Companies to Increase
The new labour laws limit the maximum basic pay to 50 per cent of CTC, thus effectively increasing the Gratuity bonus to be paid to the employee.
Under the new wages code, the gratuity amount will be calculated on a larger salary base, which will include basic pay plus allowances such as a special allowance on wages. This is expected to increase the gratuity cost of companies.
While increasing the social security (pension) components of wages, the new laws are likely to decrease the take-home salary of employees.
15 Minutes Overtime Payment
There is also a rule incoming for any 15 minutes or more overtime will be attracting overtime payment to the employees.
48 Hours Set Work Time for One Week
The government has also made it clear that 48 hours is the maximum limit for a one-week work capacity and the employers are flexible to choose this work time and make it available in 4 days, 5 days, or 6-day week structure.
Four Broad Labour Codes on Wages
With the new law, the government is all set to subsume 44 central labour laws into four board labour codes, which are – code on wages, industrial relations; occupational safety, health and working conditions (OSH) and social security. The same has already received the President’s nod.
While the code on wages was passed in Parliament in 2019, the other three codes were approved by both the Houses last year. The Labour Ministry is now all set to implement the new rules under these four labour codes.
“We have finalised the rules under the four codes which are required to implement the four labour codes. We are ready to notify these rules. The states are doing their work to firm up rules under the four codes,” says Labour Secretary Apurva Chandra.
Pertaining to the new labour rules, companies will be required to make major changes in the employees’ salary structure. These include an increase in gratuity and the exclusion of benefits such as bonus, PF, and HRA from the wages.
To counter these latest changes, the Gen Payroll software is a segment-leading software that has incorporated all the labour laws for businesses. The changes such as salary structure, payroll/leave schedules, overtime payment features are there to make full support to the upcoming labour law 2021.
Highlights of Payroll Software
However, no big changes in PayRoll software due to the implementation of the new Labour Code. Users can easily set formulas as per their requirements or Company policy.
Payroll software is A Comprehensive & Powerful HR Tool for Calculation of Salary, PF, ESI, Professional Tax, Bonus, Arrears, Loans & Advances, TDS on Salary, Leave Management, Overtime etc. It is user friendly, flexible, single structure for all different slabs is helpful for the HR department and is very easy to use.
PF, ESI, & PT rate Master is given in the software so that users can easily change rates as per the companies requirements without waiting for updation of the software.
In-Built TDS and Income Tax calculation facilities are given. TRACES Utility is given for the generation of form 16 which is helpful for Filing the Income Tax return. E-filing facility of TDS (Form 24Q) is given, generation of challan of PF ESI by Gen PayRoll software.
PayRoll: Clever Yet Professional Solutions
- Computation of salary/ wages
- Calculation of Overtime/Arrear
- Reverse salary calculation
- Provident fund
- Employee state insurance
- Gratuity
- Bonus
- Labour welfare fund
- Tax deduction at source/Income Tax returns
- Professional Tax
- Compliance of Statutory forms: PF, ESI, Wages, Pension etc.
- Online Payroll Portal
- Bulk E-mail facility and Bulk SMS facility
- Document Manager
- User-defined formulas and Templates
- Different level setups
- Advances and reimbursement calculation
- Cheque printing
- Bulk Export/Import of various information
- Different reports in Excel/Word are available
- Login rights to multiple users with user-defined rights
- Daily/Weekly backups
Brief Description of the Above Mentioned Points
1. SALARY COMPUTATION:
- User-defined, dynamic formula based Salary Structure
- Monthly Salary Lock Facility
- Bonus, Reimbursement Facility
2. OVERTIME/ARREAR:
- Auto Overtime Calculation
- Arrear Calculation
- Arrear Slips and Register
3. PF & ESI Returns:
- PF Online ECR, KYC Submission
- Form 5, 10, 12-A, 3A, 6A
- ESI Online Employee Registration
- Online ESI Challan
- Form 5, 6, 7
4. PROFESSIONAL TAX:
- State-wise Auto Professional Tax
- Monthly/Quarterly/Annual Returns
- Professional Tax Challan
5. TDS & ITR:
- Auto Income Tax Calculation as per IT Rule
- TDS Challan, Form 24Q, Form 27A Quarter Return
- SARAL II (ITR-1) & ITR-2
- Form 16/ 16AA/ 12BA
6. ONLINE PAYROLL PORTAL:
- Online access for Salary, Attendance, and Personal Info
- Online submission of Investment & Leave Application
- Download Payslips, Form 16, Computation, etc
7. Bulk SMS & E-Mail:
- Payslips and Customized Templates to Employees
- Common Templates to Employees
- Common Templates to Others
8. Gratuity and Bonus:
- Gratuity and Bonus Calculation
- Gratuity Forms A to M
- Bonus Forms A,B,C,D
10. Import/Export:
- Employee Master
- Attendance Sheet
- Salary, Arrear, Reimbursement, Overtime
- Different Types of Investments
Gen payroll makes compliance with all these ever-changing rules hassle-free for corporate houses. The Gen Payroll software is developed by SAG Infotech and you can try it for free for a limited period.
sIR,
can we have the notification on new wage cost 2022 implemented ?
It is good update.
Thanks
how is the day salary counted for working on national holidays
Some of the companies are allowing for overtime to their workmen if they work on National Holiday which is being paid @ double rate.
When is it going to be implemented?
I have worked for an IT company for 4 Years 10 Months and 15 Days.
HR denied to give Gratuity by saying that they have their own fund and for gratuity its compulsory to complete more than 5 Years to get gratuity.
but Labor law says now you are eligible after 4.6 Years.
As per my knowledge, you have to complete 5 years on a job to be eligible to claim gratuity. Once you become eligible for gratuity i.e. after completion of 5 years, if your tenure is 5years and 4 months you will be taking gratuity for 5 years but if it is 5 years and 6 months you will be taking gratuity for 6 years back to home.
As per Gratuity Act/rule , 5 years is eligibility criteria for entitlement gratuity but as act says , if you completed 4 years of service and on 5th year , you worked for 240 days , you are entitled for gratuity.
Madras and Others vs. Regional Labour Commissioner (central) – (Authority under Payment of gratuity Act, 1972). ‘Continuous service’ – an employee rendering continuous service for a period of 240 days in a year will be deemed to have continued in service for ‘one year’. An employee who has put in service for 10 months and 18 days for the fifth year subsequent to first 4 years should be deemed.
Please refer Madras High Court _ Gratuity Judgement
How many prices increases for contractual employees ,those only deducted pf&esi. What happened in this new labor laws. Increase or decrease please confirm me
Pls. acknowledge me, labour code are applicable to ICDS WORKER AND HELPER ?
If yess , how salary are increase.
मैं पिछले 2007 से NGO में कार्य कर रहा हूँ क्या मुझे जब से कार्य कर रहा हूँ तब से ग्रेजुटीं दिया जायेगा या जब से 2015 में pf एकाउंट ओपन हुआ है ।मुझे आप बताये की हमें 2007 से या 2015 से ग्रेजुटीं मिलेगा अवगत कराएं।
How many price increase of labour in Oct 2021 of new labour code-2019
No, because the Enhanced salary more than coverage salary i.e Rs.21000/-
What if my over time is not paid for and am working more than 8 hours
In work from home, we are working 13 to 14 hours in a day how we can escalate this issue
what are the basic criteria for Gratuity payments? Is there a rule for minimum staff requirement for gratuity payment? I was told minimum of 10 members is required for gratuity payment is that right. please confirm.
Yes, as per “The Payment of Gratuity Act, 1972 is applicable to factories, other establishments with 10 or more employees.
Can a company take back the salary of the hike once I got the salary revised? I got a salary of 40,000 this month as it was revised and previously it was 28000 just an example. can they have the right to revert my salary from next month to 28000 again, and also can they take back that 12k in next salary which means this month 12 k extra salary they are going to take it in next month which means my salary of next month ll be like 28k-12k =16k
It’s really good to update knowledge
Tks
Regards,
SARJERAO B SADALE
VERY NICE LAW
Please increase the rate of Security Guards watch and ward 0′ the clock unskilled to Semiskilled 🙏
What option we have to reduce notice period time. Can we go legally if we can server 60 days instead of 90 days. Please confirm?
Thanks,
Pawan
If my salary increases 23000/- from 16500 /- Then my esic will be continued or not. and what is my esic card valid for future? Kindly suggest me how to my esic card will continue?
NO, your ESIC will stop,
No, because the Enhanced salary more than coverage salary i.e Rs.21000/-
ESI contribution continues till contribution period till September. ESI will be calculated on INR 23000
Gratuity minimum time ?
Is this Labour Code applicable to Businesses/Establishments of all sizes?
The Labour Code 2020 is applicable on the establishments those who falls under the criteria of PF and ESI applicability
Will you please confirm that after this labor code bill laws regarding ID act.1947, company law, industrial law and many more will be in force mode not.
Please brief me on this matter
Regards
Alok kumar pal