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New Labor Code India: The four new labor codes introduced by the central government are going to impact millions of workers. Their salary structure, provident fund contributions, ESI benefits, gratuity, and many other aspects will be affected by the new labor law.

The new labor code also includes certain special provisions, including minimum wages, gratuity for fixed-term employees after one year of service, beneficial rules for gig workers, and definitions of salary and night shift rules for women. Let's explore the changes the new labor code will bring...

1. New Definition of Salary

The new labor code includes almost all salary components that an employee receives in the definition of salary. However, some items are excluded, such as house rent allowance (HRA), conveyance allowance, travel concession, bonuses under any law, commissions, and amounts paid to cover specific job-related expenses.

According to the new rules, allowances should not exceed 50% of the total salary. The excess allowance is subject to transfer back to wages.

2. Social Security for Gig Workers

The new labor code provides social security for gig workers. Companies will be required to contribute 1–2% of their turnover to a social security fund. This money will be used to provide essential services to gig workers.

3. Provident Fund Rules

The scope of the Provident Fund has been expanded under the new Labor Code. Under this, all industries or establishments employing 20 or more employees will be required to provide PF benefits. Previously, this rule only applied to the notified sector. This change will benefit many workers who were previously deprived of PF benefits.

4. Gratuity Benefits

Under the new Labor Code, employees no longer have to wait five years to receive gratuity benefits. Instead, there is a provision to pay gratuity upon completing just one year of service. This will directly benefit employees, and they will also receive other benefits.