Central Govt to implement New Wage Code Bill 2021 from April 1
In a fresh development under the 7th Pay Commission system, the Government of India is likely to implement New Wage Code Bill 2021 or new labour law which is to be in effect from April 1. After the implementation of the new bill, the salary, provident fund, and gratuity of the Central government employees will be impacted. And also change in official working hours and take-home salary.
It is worth mentioning here that the Central government employees were waiting for the announcement of an increase in Dearness Allowance (DA), if this New Wage Code Bill 2021 comes into effect, then employees will have a mixed experience as there will be both advantages and disadvantages. As per reports, the contribution to provident fund will rise while in-hand salary will come down.
Moreover, the New Wage Code Bill 2021 proposed by the government has the provision to have the basic salary of the employees at 50 per cent of one’s net monthly Cost to Company (CTC) and hence the changes would affect the basic pay structure of an employee. Subsequently, it will also affect PF, Gratuity, Dearness Allowance, Travel Allowance and House Rent Allowance.
According to the New Wage Code Bill 2021, employees will be entitled to gratuity even if they have been employed for just one year. However, right now, employees are getting gratuity after five years of continuous work in the same company. If the New Wage Code Bill 2021 is implemented, then it will be for the first time after independence that any changes have been made in the labour laws.
As per current rules, 12 per cent of basic salary now goes to PF. When the basic salary becomes 50 per cent of the CTC, the contribution to the PF will automatically increase.
