Things you should know about the New Labour Code along with key changes in working hours, salary, leave and others.

Matters related to Labour law and Industrial relations are mentioned in the Concurrent List in Seventh Schedule to the Constitution of India which means Parliament and State Legislature can bring reform or amend it.

India is going to witness biggest labour reforms in Independent India with an objective to universalise minimum wages and timely payment of wages.

Prime Minister Narendra Modi in a tweet on the occasion of passing of Labour Reform Bill on 23. 09. 2020 in the Parliament stated that “Labour Reforms will ensure ‘Ease of doing business’. There are futuristic legislations which will empower enterprises by reducing compliance red tapism and Inspector Raj. These reforms also seek to harness the power of technology for the betterment of the workers and industry both.”


There are already more than 25 labour laws but the situation of approximately 90% of workers working in the unorganised sector has never improved and they don’t get access to all social security.

So, the Central Government has taken a step to provide the facilities to workers and their families (including organised and unorganised sector) in a true sense.

Due to which, 29 laws are codified into 4 codes. So that workers can get social security along with health and other welfare measures.


Amalgamation of laws in four codes


The Central Government has codified 29 laws into four codes. 13 laws are amalgamated in the occupational safety, Health and Working conditions Code, 2022, 9 laws in the Social Security Code, 4 laws in the Wage Code, 3 laws in the Industrial Relations Code.


Schemes & benefits for all


The benefits will be given to workers of the organised and unorganised sector. Apart from this, Employees’ Provident Fund (EPF) and Employee’s Pension Scheme (EPS) and other health facilities will be available to all workers.


Working hours


Before the new labour code, the working hours were restricted to 7 to 8 hours per day. But from July 1, the regular working hours can become 12 hours per day but subject to restriction that workdays should be 4 days a week with 3 holidays.




Previously Labour laws required a worker to work for a minimum of 240 workdays in a year then they become eligible for leave. But the new labour code has reduced 240 days to 180 work days in a year.

However, one thing remains the same i.e. 1 leave for every 20 workday.




Before the new Labour Law, workers had to work 50 hour in a quarter as overtime. But now, it has been increased to 125 hours in a quarter.


Provident Fund


The new labour code is going to bring significant change in the Provident Fund. Before we delve further, let’s understand that Provident Fund is an investment fund made to support the employee’s retirement and serve them as a long term savings by deducting a certain amount from the employee’s salary.

The new code will increase the PF contributions of the employer and the employees which will decrease take home salaries of employees.

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