Nithyakalyani Narayanan. V
The four new labour laws — Occupational Safety, Health and Working Conditions Code; Code on Wages; Industrial Relations Code; and Social Security Code — have been passed by the Parliament and notified by the Government.
There will be many changes for both employees and employers as four new labour regulations are currently being implemented. Some areas that could be affected are lower take-home pay, higher contribution to the Employees’ Provident Fund (EPF) account, calculation of the number of paid leaves available in a calendar year and the maximum working hours in a week.
The Occupational Safety, Health and Working Conditions (OSH) Code states that an employee cannot accumulate more than 30 days of paid leave in a calendar year. If the accumulated paid leave exceeds the limit, the employer will have to pay for the excess leave (’employee’ here means those workers who are not in managerial or supervisory positions).
Leave encashment is the benefit paid by the employer to the employee for unutilized paid leaves at the time of retirement or resignation. As per labour laws, every salaried employee is entitled to a specific number of paid leaves each year, but it is not compulsory to use all of their accrued leaves. Many employers allow their workers to carry forward their unused leaves to subsequent years.
Once the OSH code is implemented, encashment of excess leave will become mandatory. Experts say the fresh rule will do away with the system of unused leave getting lapsed beyond a certain limit. The company or employers will ask their employees to utilise their excess paid leave to avoid paying them.
The new four labour laws have been passed by the parliament and notified by the Central Government. They are only awaiting an effective date for enforcement which has not yet been announced. The change in these labour laws is a part of the major economic changes implemented by the Central Government.