As stated in the 2021 Union Budget, India's new labour codes for 2022 is currently in force. However, the highly expected four labour codes on wage, social security, industrial relationships, & occupational security, health, & working conditions are again making headlines after more than a year and an extended delay over the original April 2022 rollout deadline. The Indian government has attempted to simplify the myriad wage-related rules through the New Labour Code.

These new changes will directly influence the pay structure and tax duties of the private working class, as well as the wages, provident funds, and gratuities of central government officials.

What is the Importance of Labour Law in India?

The labour law is intended to safeguard workers' interests and guarantee that their employers treat them fairly. The labour code also establishes employers' and employees' rights and jurisdiction.

When was the New Labour Code Introduced in India?

The new labour code came into effect in July 2022, affecting employees' working hours, salary restructuring, and PF contributions. According to an official source, at least 13 Indian states have pre-published draughts of the new wage law for 2022. The Center completed the process of finalising the drafted rules of the new wage code and other labour codes in February 2021, & the new labour code was announced on August 8, 2019.

According to the federal government, the states should implement new wage legislation and other labour rules. However, because it is linked to the other programmes in the system, this must happen at the same time.

What are the Critical Changes in Labour Law?

• The first modification is that the reduction, layoff, and closure threshold has been raised from 100 to 300 people.
• The Industrial Relations Code 2020 also establishes a National Commission for Industrial Relations.
• The Code on Occupational Safety, Health, and Working Conditions Code 2020, the third update, combines thirteen previous rules into one.
• The Social Security Code 2020, the fourth modification, gives gig & platform employees social security benefits.
• The fifth difference is that the Wage Code has been enacted by parliament. This code establishes the national minimum wage for all workers.

Advantages of These Modifications

The advantages of the revised labour code are stated below:

• The primary advantage is that more workers will now be covered by labour legislation.
• The second advantage is that companies must adhere to strict laws, improving employees' working conditions.
• The third advantage is that gig and platform employees will now be eligible for social security payments, which will improve their general well-being.
• The fourth advantage is that all workers in the country will be paid a minimum wage, which will reduce inequality and poverty.

What is the Significance of The New Labour Code?

The new labour code has some significance that is as follows:

• The first effect is that more workers will be covered by labour law.
• The second effect is that employers must adhere to stricter restrictions.
• The third effect is that platform and gig employees will now be eligible for social security payments.
• The fourth effect is that the country's employees will all be paid a minimum wage.

What are the Four Codes of Labour Law?

The Wage Code

The Indian Parliament's wage code is a groundbreaking project that strives to establish minimum salaries for all workers across the country. Furthermore, the Code on occupational safety, health, and working conditions will safeguard workers in dangerous sectors and compensate them in the event of injury or death.
The new labour code provides game-changing changes to modify existing labour laws. First, the Wage Code was enacted by parliament. Then, on August 8, 2019, it was approved by India's President. The Code unifies and modifies the legislation governing pay and bonuses.

The Social Security Code

The social security code will give workers advantages such as paid maternity leave, safety and health regulations, and social security benefits. The social security law will also benefit unorganised sector employees like domestic helpers, construction workers, and so on by providing them with health insurance and an old-age pension.

The Labour Code on Industrial Relationships

The labour legislation on industrial relations will make it simpler for enterprises to lay off employees or close down. The code will also affect the trade Union movement & the recognition of unions. These modifications are intended to make labour laws more user- and business-friendly. Consequently, the government has made a significant step forward in new labour codes, which will go a long way toward improving the economic climate in India.

The code on industrial relations enacted by the Indian parliament labour legislation would make it simpler for enterprises to lay off employees or cease down. The code will also affect the trade union movement and the recognition of unions.

Occupational Safety, Health and Working Conditions Code

Code on Occupational Safety, Health, & Working Conditions establishes and updates rules governing employees' health, working conditions, and occupational safety. In addition, the Bill repeals the following three pieces of legislation:

• The Factories Act of 1948
• The Mines Act of 1952
• The Dock Workers (Safety, Health, and Welfare) Act was passed in 1986.
• The Bill identifies many health indicators, such as exposure to physical, chemical, or biological agents, ergonomics, work environment, and sickness-causing situations. The Bill also compels businesses to report any accident that results in death or severe injury to the administration.

The Biggest Impact of the New Labour Code

One of the most significant effects of the new labour code will be a reduction in take-home pay, as the government plans to increase payments to provident funds or PF and other post-retirement schemes. The new legislation is set to go into effect soon, forcing firms to change their employee remuneration packages.

Wages provided to an employee include the base salary plus dearness allowance or DA & retention payment, according to the Wages Codes 2019. Other remunerations, such as PF contributions, bonuses, pensions, HRA, gratuity, overtime, and so forth, are thus excluded from the concept of wages.

Conclusion
Another noteworthy change is that employers must now compensate workers who are maimed or killed on the job. This is a significant win for labour advocates since it will give much-needed protection for employees in dangerous sectors.

Paid maternity leave, safety and health regulations, & social security benefits are all included in the new labour code. Therefore, businesses must plan for these changes and ensure that they comply with the new legislation.

So, if you do business in India, you must be aware of the most recent labour legislation modifications. Ignorance is no excuse, so make sure you understand the changes and how they will affect your company.