Delay in change in new rule under wage code
New labor laws, which were to be implemented from July 1, have been delayed, including Wage Code guidelines, which mandate that full and final payment of wages be made within two days from the last working day of an employee. needed.
By combining and reviewing previous central labor laws, the government has made several changes to create new guidelines for wages, social security, labor relations, occupational safety, health and working conditions.
The new rule consolidates 29 previous laws to create four labor codes, with a number of changes – including the wage code.
The new wage code states that a company must make full and final payment of wages within two days of the last working day of an employee following his resignation, dismissal or removal from employment and services.
Currently, it takes 15 to 60 days for businesses to make full payment of wages, and in some cases, it goes up to 90 days.
The new wage code under labor law says, “Where an employee has been – (i) removed from service or dismissed; or (ii) retrenched or resigned from service, or has become unemployed by reason of the closure, the wages due shall be paid within two working days of his removal, dismissal, retrenchment or, as the case may be, his resignation.”
This does not include gratuity or provident fund payments, as these are covered under various laws.
The Pay Code states, “wages” means all remuneration whether expressed in money, or capable of being so expressed, by way of pay, allowances or otherwise,
shall, if the conditions of employment, express or implied, have been fulfilled, be payable to the person employed in connection with his employment or in respect of work done in such employment…”
This will give relief to those employees who serve long notice period between one month to six months and have to wait for a longer period for payment.
While the labor laws were passed by Parliament and were due to come into force on July 1, they have been delayed as states are yet to draft rules using the broad guidelines given, which are required by the Constitution.
All the states and union territories need to draft and notify these laws to implement these new rules, which is yet to be done.
For example, on one of the wage code rules, only a few states and union territories (UTs) have drafted guidelines.
If the Wage Code is implemented, businesses will need to reorganize their payroll processes and work around timeliness and procedures to achieve full settlement of wages within two working days.
But for now, the wait is on in the form of new labor codes that will bring significant changes. Take-home salary, PF (provident fund) contribution and working hoursThere has been a delay, including working hours and days in a week, because Indian states are yet to notify these rules.