Major Changes in the Labor Codes

Major Changes in the Code on Wages, 2019:

Provision

Old Laws

IR Code, 2020

Remarks

Payment of Wages

Applies to employees earning ≤ 24,000/month

Applicable to all employees irrespective of salary

Wage ceiling removed

Definition of Employee

Limited to scheduled employment

Includes all categories: skilled, semi-skilled, supervisory, managerial

Broader coverage

Definition of Wages

Excludes HRA, PF, gratuity, etc.

Includes basic pay, DA, retaining allowance; excludes bonus, HRA, PF, etc.

Uniform definition across codes

Floor Wages

No provision

Central Govt. to fix floor wages by region

New concept introduced

Claim for Wages

Within 6 months

Within 3 years

Extended time limit

Payment Timeline

7th/10th day based on size

7th day for all

Simplified

Separation Payment

On termination/closure

Includes resignation & retrenchment

Broader scope

Disqualification for Bonus

Misconduct

Adds sexual harassment

Expanded

Inspections

Surprise checks

Inspector-cum-Facilitator, web-based

Ease of compliance

Penalties

500–7,500

Up to 50,000; repeat offence 1 lakh

Increased penalties

 

Major Changes in the Industrial Relations Code, 2020:

Provision

Old Laws

IR Code, 2020

Remarks

Coverage

Standing Orders Act applies to ≥100 employees

Applies to establishments with ≥300 workers

Encourages investment

Definition of Worker

Supervisory wage limit 10,000

Supervisory wage limit 18,000

Updated threshold

Fixed Term Employment

Limited provisions

Full benefits like permanent workers; gratuity after 1 year

Flexibility for employers

Recognition of Negotiating Union

No provision

Sole union recognized if only one exists

New inclusion

Conciliation

No time limit

Must conclude within 2 years

Time-bound

Industrial Tribunal

Labour Court exists

Tribunal replaces Labour Court; 2-member bench

Structural change

Strike & Lockout

Notice within 6 weeks

Notice within 60 days; applies to all establishments

Stricter norms

Concerted Casual Leave

Not defined

50% workers on casual leave = strike

New rule

Grievance Redressal

For ≥50 workers

For ≥20 workers

Lower threshold

Retrenchment/Lay-off

Permission for ≥100 workers

Permission for ≥300 workers

Relaxed norms


Major Changes in the Social Security Code, 2020

Provision

Old Laws

SS Code, 2020

Remarks

Applicability

EPF for factories in Schedule I with ≥20 employees

EPF for all establishments with ≥20 employees

Broader coverage

New Worker Definitions

Not defined

Adds Gig, Platform, Home-based, Self-employed

Inclusive

Social Security Boards

No provision

Boards for unorganized/gig/platform workers; CSR funding allowed

New governance

Inspection

Physical only

Web-based, random selection

Digital compliance

Employer Definition

Limited

Includes contractors, govt. departments

Expanded

Inter-State Migrant Worker

Narrow

Includes workers earning ≤18,000

Broader scope

Fixed Term Employment

Limited

Full benefits, gratuity after 1 year

Employee-friendly

Registers & Records

Physical

Electronic allowed

Ease of doing business

Limitation for Inquiry

No limit

5 years

Defined

Pandemic Provision

No provision

Govt. can defer/reduce contributions

New flexibility


Major Changes in the Occupational Safety, Health and Working Conditions Code, 2020

Provision

Old Laws

OSH Code 2020

Remarks

Establishment

Factories Act applies to ≥10 workers with power

Applies to ≥10 workers with power or ≥20 without

Broader coverage

Registration

Separate registrations under multiple laws

Single registration for all codes

Simplified

Employment of Women

Restricted in night shifts

Allowed with consent and safety provisions

Gender inclusive

Contract Labour Threshold

Applies to ≥20 workers

Threshold increased to ≥50 workers

Relaxed norms

Licensing of Contractors

Multiple state licenses

Single license valid across India

Ease of business

Liability of Principal Employer

Limited

Explicit liability for wages and benefits

Clear accountability

Effect of Non-licensed Contractor

Not clearly defined

Principal employer deemed contractor

Legal clarity

Payment of Wages

Under Payment of Wages Act

Aligned with Wage Code provisions

Uniformity

Employer Duties

Fragmented across laws

Consolidated duties for safety and health

Comprehensive

Employee Duties

Not detailed

Specific duties for compliance and safety

Defined responsibilities


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