New Labor Code: The central government is in the process of making changes in the new labour code and can bring some changes to it soon. Once this is implemented, the share of allowances in wedges is likely to come down.
Under this, the wage limit for allowances in the first year will be 75-80 per cent, which can be reduced to 50 per cent in three years.
In the proposed new labour code, a limit of 300 personnel has been fixed for retrenchment of employees or closure of business. After the opposition of the Labor Union, the idea of Making it 100 is going on.
Under the Industrial Relations Code, government approval will be required for companies with up to 100 employees to lay off employees or close down the business.
This will also include Basic Pay, Dearness Allowance (DA) and Retaining Allowance. house rent allowance and overtime allowance will not be included.
Understand how the whole structure will be:
In the new labour code, it has been said that if 50 per cent of the allowance is not included in the wages or more than the prescribed limit, the additional amount will be considered as remuneration.
Under this clause, he will be included in the wages. In such a situation, due to the increase in the wage, the applicant and the employer will have to contribute more to the provident fund.
This will also affect the amount of gratuity. The biggest impact of this will be on the employee's take-home salary, which will decrease.
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