The BRICS TimesThe four labour codes introduce revised rules for daily working hours, gratuity eligibility, work-from-home norms, and benefits for gig workers.
The Centre announced the rollout of new labour codes on Friday. It merged 29 labour laws into four comprehensive codes. This move overhauls outdated rules that governed factories and workers for decades.
The four labour codes set revised rules for working hours and gratuity. They also cover work-from-home setups and provisions for gig workers.
“By modernising labour regulations, enhancing workers’ welfare and aligning the labour ecosystem with the evolving world of work, this landmark move lays the foundation for a future-ready workforce and stronger, resilient industries driving labour reforms for Aatmanirbhar Bharat,” read the statement.
What is gratuity?
Gratuity is a lump-sum payment given by an employer to an employee. It serves as a token of appreciation for long-term service.
Traditionally, employers paid this after five years of continuous work. It was given upon retirement, resignation, or termination.
What do the new labour codes say on gratuity eligibility?
A major change is the easing of gratuity eligibility. This shift will likely help a large and diverse workforce.
Under old rules, fixed-term employees only qualified for benefits after five years. The new codes relax this requirement significantly.
Fixed-term employees (FTEs) can now access gratuity after one year of service. This is according to the PIB press release on the new labour codes.
The intention here is to ensure equality between fixed-term and regular staff. The new rules guarantee FTEs the same salary and medical benefits.
Additionally, 50 per cent of total pay will be added back to calculate wages. This ensures consistency when calculating gratuity and pension benefits.
Export sector fixed-term workers will also receive gratuity and Provident Fund (PF) benefits.
Key provisions of the new labour codes
Businesses can now set worker shifts between 8 to 12 hours daily. The total must not exceed 48 hours a week.
Previously, daily shifts had a cap of 9 hours. Any overtime work gets paid at twice the regular wage rate.
Contractors can now get a single license valid for five years. This allows them to operate across the entire country.
The new labour codes formally define gig and platform work for the first time. This brings these workers under social security benefits.
To help workplace flexibility, the codes introduce work-from-home options. This applies to service sectors based on mutual agreements.
However, new laws may allow eligibility after one year for specific contract employees.
