NEW DELHI: The government has deferred implementation of labour codes beyond April 1, in view of delay on the part of states to finalise Rules. The move is expected to give more time and bandwidth to companies to re-tweak their salary structures and other human resources (HR) policies as certain provisions of the Code would have led to increase in employee cost for the companies.
Once the wages code comes into force, there will be significant changes in the way basic pay and provident fund of employees are calculated. The labour ministry had envisaged implementing the four codes on industrial relations, wages, social security and occupational health safety & working conditions from April 1, 2021.

The ministry had even finalised the rules under the four codes. "Since the states have not finalised the rules under four codes, the implementation of these laws are deferred for the time being," a source told PTI. According to the source, few states had circulated the draft rules. These states include Uttar Pradesh, Bihar, Madhya Pradesh, Haryana and Uttarakhand.

Since labour is a concurrent subject under the Constitution of India, both the Centre and the states would have to notify rules under the codes to bring those into force in their respective jurisdictions. Under the new wages code, allowances are capped at 50 per cent. This means half of the gross pay of an employee would be basic wages.

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