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In what ways will the new labour laws impact workers: Explained

-By ArdorComm Media Bureau

The new labour laws, which are scheduled to go into effect on July 1st, will significantly alter the nation’s workplace culture. If the new labour codes are put into place, a number of areas of employment and workplace culture—from working hours to in-hand pay—are anticipated to change. By announcing their impending adoption, the Ministry of Labour and Employment has finalised the provisions under the four labour laws, opening the way for reforms to become a reality. After receiving the President’s assent, the four major codes on wages, industrial relations, social security, and occupational safety, health, and working conditions (OSH) have already been informed. However, the regulations must be notified in order to implement these four codes.

Let us look at the laws and the proposed changes:


On September 29, 2020, the Center announced four labour codes: Code on Wages, Industrial Relations Code, Social Security Code, and the Code on Occupational Safety, Health, and Working Conditions. These 29 labour laws, which have not changed since Independence, are expected to be replaced.

To enforce these laws in their separate jurisdictions, states must notify rules under the four codes. The drafted guidelines for the Code on Wages have only been issued by 23 states and Union Territories. When all states agree to the codes, they will be put into effect.

Working hours

The proposed new labour laws provide companies the option of having four working days each week rather than five or six.

Four days at work do not, however, mean less effort. If the number of working days is decreased, the hours of work will increase. Employees will be required to complete the 48-hour work week. This indicates that they must put in 12 hours every day of work rather than the usual eight.

There is no reduction in paid holidays due to the fewer working days. Those working four days would get three paid holidays every week.

In hand salary

The take-home income is anticipated to decrease under the new laws as Provident Fund (PF) contributions from both the employer and the employee rise. It is mandatory that the PF contribution be equivalent to 50% of gross pay.

Leaves eligibility 

The number of working days needed to qualify for leave has been lowered from 240 to 180 under the new labour laws.

A new employee must work 240 days in accordance with the law before they are qualified to take a leave. The minimum number of days an employee must work to qualify for leave under the new labour laws has been lowered to 180.

One day of leave is gained for every 20 days of employment, yet the amount of leave earned does not alter. There will continue to be 30 leaves that can be carried forward.


The new industrial relations code would make conducting business easier by allowing businesses with up to 300 employees to proceed with layoffs, retrenchments, and closures without obtaining authorization from the government. According to The Business Standard, all companies with up to 100 employees are currently immune from needing government approval for layoffs, retrenchments, and closures.

Work from Home

The purpose of the new regulations is to enhance employee welfare. They are familiar with the work-from-home (WFH) concept that was used when the COVID-19 pandemic was in effect.

To ensure that the work-life balance is not impacted, companies must have some fundamental WFH policies and practises in place.

What is meant by “workers”?

Employees who are classified as workers will benefit from the new labour laws.

The new laws’ definition of “workers” is similar to that found in the Factories Act. This does not imply, however, that factory-based blue-collar workers are the only ones eligible for the benefits.

The service industry is included in the scope of the new labour laws. According to The Economic Times, every individual contributor (a person who is not primarily involved in managerial, administrative, or supervisory roles, with the exception of supervisors, who have a monthly wage cap of Rs 18,000 specified) should be considered a worker under the new labour laws, regardless of the task that is given to them or the compensation they receive.

With inputs from Agencies

The author, Pratik Ghosh is associated with ArdorComm Media

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