From 1st April: Working Hours May Increase To 12 Hours , PF And Retirement Rules Will Also Change
New Delhi, January 11, 2021: From April 1, 2021, there may be a significant change in your gratuity, provident fund (PF) and working hours. Even the balance sheets of companies will be affected. The reason behind these changes is the three Wages Code Bill passed in Parliament last year. These Bills are likely to come into force from April 1 this year.
Under the new definition of wage, allowances will be a maximum of 50 percent of the total salary. This means that the basic salary (basic pay and dearness allowance in government jobs) should be 50 percent or more than the total salary.
Most employees’ pay structure will change, as the non-allowance portion of the salary is usually less than 50 percent of the total salary. At the same time, the share of allowances in the total wage becomes even more. Increasing your basic salary will also increase your PF; PF is based on basic salary. Increasing the basic pay will increase the PF, which means there will be a cut in take-home salary.
An increase in contribution to gratuity and PF will increase the amount received after retirement. The salary structure of high-paid employees will change and will be the most affected. Increasing PF and gratuity will also increase the cost of companies. Because they too have to contribute more to the PF for the employees.
An official said, “The Labor Ministry has suggested to the Parliamentary Committee something which, if accepted, can increase the take home take-home the employed people but may cause loss to the pensioners. The Ministry of Labor has suggested reducing both employee and employer contribution to Employee Provident Fund (EPF) from 12% to 10%.”
The new law will increase the maximum working hours to 12 hours. According to the new law, the work done more than 15-30 minutes will be counted overtime. Less than 30 minutes is not considered overtime-eligible in the current rule. It prohibits an employee from working continuously for more than 5 hours. Instructions to give employees a rest of half an hour after every five hours are also included in the rules.
