Hi Everyone,
Hope all of you are well along with your families. I have been reading in multiple places that there is a change in the salary structure and a change in the PF contributions. I'm totally confused. Can someone help me out here, please?
Thank you in advance,
Aaron
From India, Bengaluru
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Hope all of you are well along with your families. I have been reading in multiple places that there is a change in the salary structure and a change in the PF contributions. I'm totally confused. Can someone help me out here, please?
Thank you in advance,
Aaron
From India, Bengaluru
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Dear Aaron,
As of now, all the recently passed four Labor Codes are yet to be notified for enforcement; the Rules under each Code are also yet to be framed by the State Governments. Unless the Rules are framed and notified, the Codes cannot be enforced. Therefore, insofar as the subject matter of wages to employees is concerned, the existing laws are in force even now.
However, your presumption about the likely change in the wage/salary structure is correct insofar as the definition of the term 'wages' u/s 2(y) of the Code on Wages, 2019 which adopts a holistic meaning covering all remuneration payable to the employee under the contract of employment but dividing it into two major segregations viz., INCLUSIVE and EXCLUDED components to be forming part of wages with a certain definite proportion between the two. There is also a concurrent statutory caveat that whenever the proportion gets disturbed by a higher sum total of the excluded components, other than gratuity and retrenchment compensation, the excess shall be added to the sum total of the inclusive components viz., Basic, dearness allowance, and retaining allowance, if any for the purpose of the Code.
I request you kindly to make a critical analysis of the definition on your own to understand its wider import.
About your query on the EPF subscription, as of now, the definition of the term 'wages' under the EPF Act 1952 still holds good. The definition of the term 'wages' u/s 2(88) of the new Code on Social Security, 2020 is the same or similar to the definition of the term in the CoW, 2019. Therefore, existing confusion about the calculation of the EPF subscription would be put to an end when the new Codes get enforced across the country.
From India, Salem
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6185As of now, all the recently passed four Labor Codes are yet to be notified for enforcement; the Rules under each Code are also yet to be framed by the State Governments. Unless the Rules are framed and notified, the Codes cannot be enforced. Therefore, insofar as the subject matter of wages to employees is concerned, the existing laws are in force even now.
However, your presumption about the likely change in the wage/salary structure is correct insofar as the definition of the term 'wages' u/s 2(y) of the Code on Wages, 2019 which adopts a holistic meaning covering all remuneration payable to the employee under the contract of employment but dividing it into two major segregations viz., INCLUSIVE and EXCLUDED components to be forming part of wages with a certain definite proportion between the two. There is also a concurrent statutory caveat that whenever the proportion gets disturbed by a higher sum total of the excluded components, other than gratuity and retrenchment compensation, the excess shall be added to the sum total of the inclusive components viz., Basic, dearness allowance, and retaining allowance, if any for the purpose of the Code.
I request you kindly to make a critical analysis of the definition on your own to understand its wider import.
About your query on the EPF subscription, as of now, the definition of the term 'wages' under the EPF Act 1952 still holds good. The definition of the term 'wages' u/s 2(88) of the new Code on Social Security, 2020 is the same or similar to the definition of the term in the CoW, 2019. Therefore, existing confusion about the calculation of the EPF subscription would be put to an end when the new Codes get enforced across the country.
From India, Salem
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Four Labour codes along with Central and State Rules are yet to be implemented. The definition of wages as per the wage code and all other codes is the same and similar. According to the new definition, the wages (Basic & DA) will change for all organizations across the country. Due to the change in Basic and DA, the contribution to PF will also change. Moreover, in the Social Security Code, under the PF clause, it has been mentioned that the PF contribution will be 10 percent instead of 12 percent as of the current date.
S K Bandyopadhyay (WB, Howrah) CEO-USD HR Solutions
From India, New Delhi
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S K Bandyopadhyay (WB, Howrah) CEO-USD HR Solutions
From India, New Delhi
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All these apprehensions are in the context of the New Code on Wages. If the Covid-19 third wave is not that imminent, GOI may push for a faster implementation of this code, I guess.
Also, recommend taking a look at this post that discusses the same topic: https://www.citehr.com/628918-centre...ml#post2465438
From India, Bangalore
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Also, recommend taking a look at this post that discusses the same topic: https://www.citehr.com/628918-centre...ml#post2465438
From India, Bangalore
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