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New Labour Code Gratuity Rules

Understand the New Labour Code in India, its impact on salary, working hours, PF, and employee benefits. A simple guide to the latest labour law changes

ShivamFinowings
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New Labour Code Gratuity Rules

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  1. New Labour Code Gratuity Rules Explained: Key Highlights India is undergoing a major labour reform with the implementation of the New Labour Code, replacing 29 outdated labour laws with 4 simplified and modern codes. These include: 1. Code on Wages (2019) 2. Industrial Relations Code (2020) 3. Social Security Code (2020) 4. Occupational Safety, Health & Working Conditions Code (2020) The goal is to create a more employee-friendly, transparent, and business-friendly work environment. Why the Change?

  2. Previous labour regulations were outdated and complex. The new codes focus on: ● Wage standardization ● Workplace safety ● Social security expansion ● Faster dispute resolution This benefits both employers and employees while improving India’s ease of doing business. Major Changes Under the New Labour Code ✔ Working Hours ● Maximum 48-hour work week ● Option for a 4-day work week ● Overtime paid at 2x wage rate ✔ Salary Structure & PF ● Basic pay must be at least 50% of CTC ● Higher PF and gratuity contributions ● Slight reduction in take-home salary but better long-term savings New Labour Code Gratuity Rules One of the most significant updates is related to gratuity eligibility. Under the New Labour Code Gratuity Rules: ● Eligibility reduced from 5 years to just 1 year ● ₹20 lakh gratuity tax exemption limit remains the same ● Applies to full-time, contract, platform, gig, and temporary workers This change increases financial security and benefits a much larger workforce. Leave & Social Security Updates ● Minimum 180 days required to earn leave ● Leave can be carried forward and encashed ● Social security now covers gig and platform workers with PF, ESIC, maternity benefits, and insurance.

  3. Work-From-Home Recognition For the first time, remote and hybrid working models are officially acknowledged in labour law through mutual agreements. Impact of the New Labour Code For Employees: ✔ Higher retirement benefits ✔ More workplace protection ✔ Transparent wage structure For Employers: ✔ Simplified compliance ✔ Flexible working models For India: ✔ Better labour management ✔ Stronger investment climate Conclusion The New Labour Code aims to modernise India’s labour system, create wage transparency, improve employee rights, and simplify compliance for businesses. With changes like salary restructuring, flexible working hours, and the impactful New Labour Code Gratuity Rules, India is building a more organised and equitable work environment for the future. #newlabourcodegratuityrules #finowings

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