Budget 2025: In the upcoming Budget 2025, the government may announce the implementation of new labor codes, which may bring significant changes in working hours and employee benefits.
According to sources, Union Finance Minister Nirmala Sitharaman may announce the implementation of these labor codes in a phased manner, which will not only affect the employees but will also affect the businessmen. These new labor codes will be implemented in three phases, creating new challenges and opportunities for both employees and companies.
Phased implementation of Labor Codes
The aim of these new labor codes is to streamline the workplace and strengthen the social security of employees. This change will affect all types of businesses, small and large. In the first phase, large companies with more than 500 employees will be required to follow these codes. In the second phase, medium-sized companies with 100-500 employees will be brought under its purview. In the third phase, these codes will be implemented on small companies with less than 100 employees.
Small businesses will be given about two years to implement these rules. Considering that MSMEs (micro, small and medium-sized enterprises) account for 85% of India’s business structure, their transition will be particularly important.
Impact on working hours and salaries
These new rules may also include a policy of working four days a week and resting for three days. Its purpose is to create a work-life balance for employees. However, the four-day working rule may lead to an increase in working hours, and provident fund (PF) deductions may increase, which may reduce the salary of employees.
Phased implementation of Labor Codes
The aim of these new labor codes is to streamline the workplace and strengthen the social security of employees. This change will affect all types of businesses, small and large. In the first phase, large companies with more than 500 employees will be required to follow these codes. In the second phase, medium-sized companies with 100-500 employees will be brought under its purview. In the third phase, these codes will be implemented on small companies with less than 100 employees.
Small businesses will be given about two years to implement these rules. Considering that MSMEs (micro, small and medium-sized enterprises) account for 85% of India’s business structure, their transition will be particularly important.
Impact on working hours and salaries
These new rules may also include a policy of working four days a week and resting for three days. Its purpose is to create a work-life balance for employees. However, the four-day working rule may lead to an increase in working hours, and provident fund (PF) deductions may increase, which may reduce the salary of employees.
Negotiations with States and the Framework for Regulations
The labour ministry is in talks with various states, such as West Bengal and Delhi, to implement these codes, where draft regulations are being finalised. The government hopes to implement the Wages and Social Security Code by March 2025, while rules for the rest of the codes are being framed with the remaining states.
What are Labor Codes?
The Government of India has consolidated 29 central labour laws into four major labour codes that aim to strengthen businesses and enhance social security of employees. These codes include:
- Code on Wedges
- social security code
- Industrial Relations Code
- Occupational Safety, Health and Working Conditions Code
These improvements aim to improve the workplace environment as well as provide better safety to employees.
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