New Delhi: From April 1, 2021, there may be a big change in your gratuity, PF, and working hours. Gratuity and Provident Fund (PF) items will be increased to employees. At the same time, the money in hand (take-home salary) will be reduced. Even the balance sheets of companies will be affected. The reason for this is the three Wages Code Bill (Code on Wages Bill) passed in Parliament last year. These Bills are expected to come into force from April 1 this year.

Under the new definition of wage (wages), allowances will be a maximum of 50 percent of the total salary. This means that the basic salary (basic salary and dearness allowance in government jobs) should be 50 percent or more of the total salary from April. It is noteworthy that for the first time in the 73-year history of the country, changes are being made in the labor law in this way. The government claims that it will prove beneficial for both employers and workers. Along with this, the new draft law has proposed to increase the maximum working hours to 12.

According to the new draft rule, the basic salary should be 50 percent or more of the total salary. This will change the salary structure of most employees, as the non-allowance portion of the salary is usually less than 50 percent of the total salary. At the same time, the share of allowances in the total salary becomes even more. Increasing your basic salary will also increase your PF. PF is based on basic salary. Increasing the basic salary will increase the PF, which means there will be a decrease in take-home or on-hand pay.

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