Know in detail which 4 new labour rules the government has brought.

By implementing four new labor laws nationwide beginning on November 21, the administration has taken a significant step. With this action, a streamlined and cohesive framework has taken the place of 29 previous labor regulations.

Why was this change needed?

Nearly forty antiquated laws, each with its own regulations, paperwork, and administrative roadblocks, controlled India's labor system for many years. These intricate rules were difficult for both employers and employees to comprehend and abide with. The government combined all of these laws into four simplified labor codes in order to remove this confusion:

Wage Code, 2019

Industrial Relations Code, 2020

Social Security Code, 2020

Occupational Safety, Health & Working Conditions Code, 2020

In the past, salaries were defined differently by each institution. This made it possible for businesses to change salary components while maintaining a modest base income in order to lower PF deductions.

In India today, salaries are defined in the same way. Allowances plus the base pay must make up about half of the total income. PF, bonuses, gratuities, and other perks shall all be computed equitably. Workers will benefit from improved long-term savings and an increase in PF contributions.

The employer is required to pay an employee twice their regular salary if they work more than the allotted hours. In order to prevent financial strain at the end of the month, the government has also made sure that workers receive their salaries on schedule.

Benefits from social security, such as PF, ESIC, and gratuity, will now be more extensive than previously. Gig workers, delivery drivers, app-based drivers, and platform employees who did not previously have these benefits fall under this category.

To be eligible for a gratuity, employees had to work for a company for five years. Even after a year of service, Fixed Term Employees (FTEs) are eligible to collect gratuities under the new regulations. For temporary or contract workers, this is a huge benefit.

There will be less paperwork, forms, and registers for businesses. The time-consuming compliance procedure will be replaced with a single digital system. This lessens the administrative load and promotes openness.

As long as they provide their approval and the right safety precautions are taken, women can undertake any kind of employment, including night hours. This makes it easier for women to acquire better-paying jobs and advance gender parity in the workplace.

How the New System Differs from the Old One

Letters of Appointment Previously:

Not required. Now: To ensure openness and job stability, each employee must have a formal appointment letter.

Social Security Protection Previously: Restricted; many employees were left out. Now: Social Security covers all types of workers, including gig workers and platform workers.

Rules for Minimum Wage Previously: Only used in a few sectors. Now: Every employee is legally entitled to a minimum wage. The idea of a floor wage will lessen state-to-state wage disparity.

Annual Examinations Previously: Only required in specific industries. Now: Every employer is required to provide free yearly health examinations to all employees.

Paying Salaries on Time Previously: There were no stringent rules. Now: Paying salaries on time is required to guarantee employees' financial security.

Women Employed at Night Previously: There were a lot of limitations. Now: With permission and appropriate security measures, women can work nights and in any industry.

ESIC Protection Previously: Only applied to certain industries; units with fewer than ten employees were excluded. ESIC coverage is now available nationally. Even with a single employee, hazardous companies are required to offer ESIC benefits. 

Licensing and Registration Previously: It required several licenses, registrations, and returns. Now: The country has implemented a single registration, single licensing, and single return system.

According to the administration, this change was required since outdated laws were no longer appropriate for contemporary workplaces. The goal of the new framework is to make the labor system more straightforward, open, and equitable for both companies and employees.