NEW LABOUR CODE -By A S Amarnath B.com, FCA, LLB
Is your establishment UP for upcoming labour codes? The new labour codes have been enacted in the pursuit of simplifying, consolidating and rationalizing the central and state labour laws. One of the objectives is to improve India’s position in the global ‘ease of doing business’ index. All the four codes have received presidential assent and expected to be implemented shortly. The state governments are in the process of finalizing their rules with respect to these codes. The existing 28 labour acts have been amended and consolidated into the following four codes: • The Code on Wages
• The Code on Social Security • The Occupational Safety, Health and Working Conditions Code • The Industrial Relations Code
Definition of Wages All the codes have adopted uniform definition of wages. The definition of wages covers all salary components expressed in terms of money or capable of being so expressed. However, the codes provide some specific exclusion to arrive at the wages.
Exclusions Bonus payable under any law which does not form part of the terms of the employment contract
House Rent Allowance Conveyance allowance Leave travel concession Overtime allowance Commission House accommodation provided under government order Employer contribution to provident fund or pension fund Amount paid to defray special expenses Gratuity Retrenchment compensation Award or settlement
The above exclusions (except gratuity and retrenchment compensation) are capped at 50% of total remuneration. Remuneration in kind to the extent it does not exceed 15% of total wages need to be included in wages.
Key Aspects
