The new wage code can be implemented by the Ministry of Labor in July. This will benefit the people of the unorganized sector more. This will secure the future of the employees.
New Wages Code
The new wage code rule can be implemented by the Ministry of Labor in July. With this, a change can be seen in the salary structure of the employed people. Under the new rule, the future of the employees will be secure because it will increase their contribution towards PF and other things, due to which they will get huge amount after retirement. However, with the new wage code, there will be a reduction in the salary received every month. So what is the wage code and how will its implementation affect the salary, know the complete details.
what is new wage code
The government has prepared 4 new wage codes by combining 29 labor laws. These include the Industrial Relations Code, Code on Occupational Safety, Health and Working Conditions Code (OSH) and Social Security Code on Wages. According to the Wage Code Act, 2019, now the basic salary of an employee in any company cannot be less than 50 percent of the cost of the company (CTC).
Advantages of Wage Code
1. With the implementation of the new wage code, the PF of the employees will be deducted more, this will secure their future. With this, they will get good pension and big fund after retirement.
2. This rule will also increase the contribution to the gratuity, so that the employee will not face any problem of money in emergency.
3. With the implementation of the new rule, the employees of the unorganized sector will be benefited because till now there is no fixed format for the salary of such people in many companies.
4. With the new wage code, there will be equality in the salary of employees working in every industry and sector.
5. After the implementation of the new rule, there will be more contribution in PF. There will be more investment than this. Hence more tax savings. Although it should not be more than 2.5 lakhs.
Take home salary may decrease
While the future will be secure with the new wage code, on the other hand, the salary in hand can be cut. Actually, contribution to PF will have to be given more. Since most companies also deduct the second part of it from the employee’s salary, in such a situation your take home salary may be less.
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