India's New Labour Codes: Major Changes to Gratuity, Working Hours, and Worker Benefits | India News
Image Source: Internet
The Indian government has rolled out a significant overhaul of its labour laws, consolidating 29 existing laws into four comprehensive codes. The Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020, and the Occupational Safety, Health and Working Conditions Code, 2020 aim to simplify and strengthen the framework governing workers' rights and welfare. One of the key highlights of the new labour codes is the change in gratuity eligibility. Fixed-term employees will now be eligible for gratuity after one year of continuous service, compared to the previous five years. Additionally, 50% of the total remuneration will be added back to compute wages, ensuring consistency in calculating gratuity, pension, and social security benefits. The new codes also introduce revised working hours and overtime compensation. Businesses can employ workers for 8-12 hours in a day, not exceeding 48 hours in a week. Overtime will be paid at double the normal wage rate. Contractors can now obtain a single license, valid for five years, for operating anywhere in the country. The revised rules for layoffs simplify the process, raising the threshold for lay-off/retrenchment/closure from 100 to 300 workers. This means companies with up to 299 employees can now lay off staff without government approval. The labour codes also bring benefits for gig and platform workers, defining gig and platform work for the first time and expanding social security to categories previously outside formal labour regulation. A fund has been established to finance schemes for unorganised, gig, and platform workers, covering life, disability, health, and old-age benefits. To improve flexibility at the workplace, the labour codes include a work-from-home provision in service sectors by mutual consent. Minimum wages have been set for all workers, in both the organised and unorganised sectors, with a statutory floor wage to be set by the government. The new codes also introduce provisions for timely payment and prevention of unauthorized deductions. The definition of wages has been revised to include basic pay, dearness allowance, and retaining allowance. Gender inclusivity has been enhanced, with equal pay for equal work and the extension of maternity benefits to all women workers in unorganised sectors. The Code on Social Security 2020 calls for social security benefits to all workers, including unorganised, gig, and platform workers. Benefits will cover life, health, maternity, and provident fund benefits. Inter-state migrant workers will also receive benefits, including a lump-sum annual travel allowance and social security benefits across states.
