‘Alert! New wage code’: 30-minute overtime pay for employees

New Delhi: Employees who have to work overtime on a daily basis due to excessive workloads or deadlines and get no pay to have some good news. Reports indicate that a new labour law may be implemented under the New-Wage Code, which could result in a change in your salary structure, especially your take-home pay. Changes are currently being made to the wage code regarding things such as working hours, overtime, and break times.

New Wage Code:

The government has created four wage codes by combining 29 labor laws: the Code on Wages, the Industrial Relations Code, the Occupational Safety and Health Code, and the Social Security Code. Several changes were made to the labor codes in August 2019 – industrial relations, the safety of work, health and working conditions, and social security.

In accordance with the Wage Code Act, 2019, an employee’s basic salary cannot be less than 50% of the costs of the company (CTC). Companies reduce basic salaries and give more benefits from above so that the company isn’t burdened with additional expenses. As part of the new implementation of the New-Wage Code, it is likely that an employee who works 15 – 30 minutes extra in overtime by counting 30 minutes will receive extra pay. At present, employees working less than 30 minutes are not eligible for overtime.

With the implementation of the Wage Code Act, 2019, the salary structure of employees will change completely. The ‘Take Home Salary’ of employees will diminish since the Basic Pay and the PF of employees will increase. With the increase in PF, their share of the gratuity will also rise. Employees of the unorganized sector will also benefit from the new wage code. We will change the rules related to salaries and bonuses and employees in every industry and sector will receive equal pay.

Virjesh Upadhyay, who is the general secretary of EPFO and a board member of the Bharatiya Mazdoor Sangh, said there is a change to the rules on important issues such as working hours, annual holidays, pension, PF, take-home salary, and retirement. Originally, the new wage code had been scheduled to be implemented on April 1, 2021, but has been pushed back to July 2021. However, it may still be implemented in April 2022.