4-day work week, major change in take-home salary: New labour codes in 5 points

New wage code from July 1? Even if the 4-day work week gets implemented, Indian companies registered under the Factories Act may not be able to reduce the number of working days increasing the number of per-day working hours.

If the four new labour codes get implemented from July 1, major changes will take place on employees pertaining to their working hours, annual leave, take-home salary etc. The implementation is just a matter of time as states have already come out with the draft rules based on the four labour codes.

Can Indian companies adopt a 4-day work week once the 4 new labour codes get implemented?  (Representative Image)

Here are 5 points to know how these 4 labour codes will impact you:

1. Under these new rules, companies will be permitted to make their employees work for four days instead of five.

2. In case, companies opt for a 4-day week instead of 5, employees will need to work for 12 hours a day, instead of eight so that the total working hours do not get impacted.

3. The basic salary of the employees will have to be 50% of the gross salary. The PF contributions of the employees and the employer will increase and the take-home salary will come down.

4. The new rules recognise the work-from-home structure which came into practice amid the Covid-19 pandemic.

5. The new rules have increased the eligibility requirement for leaves from 240 days of work to 180 days of work in one year which means an employee has to work for 240 days after joining a new job to be eligible for getting a leave.

According to experts, Indian companies may face may a roadblock in implementing a four-day work week under the present structure as they may have to pay employees overtime for the additional work hours. The companies registered under the Factories Act can not make one employee work for more than nine hours on any day and 48 hours on any week.

Countries which have a four-day work week and how

Several countries such as Spain, Japan, New Zealand, Ireland, Scotland, and Iceland have a four-day work week on an experimental basis but they reduced the number of weekly working hours.

What are these 4 labour codes?

These four labour codes are: the Code on Wages, 2019; the Industrial Relations Code, 2020; the Code on Social Security, 2020; and the Occupational Safety, Health & Working Conditions Code, 2020,