Your salary slip will change from April 1 – here are other new rules

Centre is planning to implement New Wage Code Bill 2021 from April 1. An announcement in this regard was made by Finance Minister during Budget 2021.

Amid the wait for the announcement of increase in DA (Dearness Allowance), the PM Narendra Modi-led government can implement the new labor law from April 1. If this happens, employees will have a mixed experience because the new law will give you some advantages and some disadvantages.

As per reports, your contribution to the Provident Fund will increase but the in-hand salary will come down.

1. Salary details will be changed

The New Wage Code Bill has been passed by Parliament. Now preparations are being made to implement it. There will be a big change in your salary when the new labor law comes into force. The figures for PF, Gratuity, Dearness Allowance, Travel Allowance and House Rent Allowance will all be changed.

2. All allowances capped at 50 percent

In the new labor law, there is a provision that all the allowances including dearness, travel and rent allowance will not be more than 50 percent in total. That is, if your CTC (Cost to Company) is Rs 20,000, then all the allowances together will not be more than 10,000.

3. Basic salary will increase

According to the new rules, the share of basic salary in your CTC should be 50 percent or more. If the basic salary is less than 50 percent in your salary details, then it is going to change soon. Your CTC may also increase along with your basic salary when the new rules are implemented.

4. In-hand salary to come down

Your Take Home salary may decrease after the new law comes into force because when the basic salary is up to 50 percent, then 12 + 12 = 24 percent of its share will be transferred to your PF account. As of now, most companies deduct the contribution (12 per cent) of their PF from the CTC of the employees.

5. Contribution to PF will increase

According to the current rules, 12 per cent of your basic salary now goes to PF. When the basic salary becomes 50 per cent of the CTC, the contribution to the PF will also increase. For exampke, for a person with a monthly CTC of Rs 20,000, Rs 10,000 will be the basic salary and Rs 1,200 will go to the PF account.

6. Gratuity rule will change

New rules of gratuity have been made in the new labor laws. Right now, employees are entitled to gratuity after 5 years of continuous work in the same company, but in the new law, employees will be entitled to gratuity even if they have been employed for just one year.

7. Rules are changing after 73 years

For the first time after independence, any government is going to make changes in the labour laws. Seeing the demand of the time, the government is justifying them. The government claims that the new labour laws have taken care of both the employer and the employee.