Four-days work week, full and final settlement within 2 days of exit — new changes at workplaces to reflect from July 1

• The new labor codes are expected to be implemented tomorrow, July 1.
• New labor laws will bring a lot of changes in the working culture.
• While the central government plans to implement these new laws by July 1, many states are still yet to ratify the laws.

The new labor codes on wages, social security, industrial relations, and occupation safety, health, and working conditions are expected to be effective tomorrow, July 1.

And there could be a lot of changes in the salary restructure, provident fund and gratuity, working hours, and leaves.

While the central government plans to implement these new laws by July 1, many states are still yet to ratify the laws. Only 23 states and union territories (UTs) have released the draft guidelines under the Code on Wages, according to Rameshwar Teli, Minister of State for Labour and Employment.

Four days week with 12 hours shift

The new laws will allow companies to have four days working instead of five or six. However, four days doesn’t mean fewer working hours.

Employees will have to work for 12 hours a day instead of 8 hours to compensate for the third leave in a week. However, this also doesn’t mean a cut in paid holidays.

Four-day work week would mean three paid holidays

New exiting polices

According to the new labor codes, companies will have to pay full and clear all pending wages and salaries within the two days of employees’ last working day as per their respective resignation date, dismissal, and removal from employment.

Currently, companies pay out or complete their employees' dues in 45 to 60 days from the employee’s last working day. In some cases, companies take 90 days to clear the dues.

Work from home

Remote working became the new working culture during the covid-19 pandemic, and now employees want this trend to continue.

The new labor laws are drafted to help the employees maintain their work-life balance.

Take-home salary, provident funds, and gratuity

The take-home salary for every month will change significantly because the basic salary will be at least 50% of the gross monthly salary, as per the new wage codes.

This also means that there will be a substantial rise in gratuity and PF contribution of the employee.

Leaves

The most significant changes will reflect in the number of paid leaves. Usually, an employee in a government office gets 30 days a year. In addition, employees can cash upto 300 holidays on carrying forward; however, the new laws are demanding to increase this number to 450.

Presently, there are 240 to 300 holidays in different departments. Employees can take these holidays in cash only after 20 years of service.

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