Labour Codes



  • The Union government is keen on going ahead with the implementation of the four labour codes.


  • These four labour codes will rationalise 44 Central labour laws.
  • Once the wages code comes into force, there will be significant changes in the way basic pay and the provident fund of employees are calculated.
  • It would result in a reduction in the take-home pay of employees and a higher provident fund liability for the companies.
    • This is because, under the new wages code, allowances are capped at 50%.
    • This means half of the gross pay of an employee would be basic wages.
    • Provident fund contribution is calculated as a percentage of the basic wage.
  • The Ministry had finalised the rules under the four codes. But these could not be implemented because many States were not in a position to notify rules under these codes in their jurisdiction.
  • Labour is on the Concurrent List of the Constitution and, therefore, both the Centre and the States have to notify rules under these four codes to make them the laws of the land in their respective jurisdictions.
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