A new wage code can be implemented by the government from July 1 across the country. With the implementation of the new wage code, the in-hand salary of the employees will be reduced, while they will get the benefit of it at the time of retirement.
The government is preparing to implement the new wage code from next month i.e. July 1. The change in the wage code from July 1 will have the biggest impact on the employees of the private sector. If you also do a private job, then this news is of your use. After the implementation of the new wage code, the in hand salary of the employees will be reduced. But your retirement benefit will increase.
Preparation to be implemented from 1st July
With the implementation of the new labor code, you will have both advantages and disadvantages. According to the news, the New Wage Code 2019 is set to be implemented from July 1. For example, the CTC of an employee consists of basic salary, HRA, retirement benefits like PF and gratuity and other allowances.
Basic salary will be 50% of CTC
In the current structure, the basic salary ranges from 30 to 40 percent of the employee’s salary. Apart from this, there is pension allowance, HRA, PF etc. On this basis PF is deducted from your salary. But now according to the new structure, the basic salary should be 50 percent of the CTC. This will have a direct impact on your PF and Gratuity. Apart from this, it will be mandatory to work 48 hours a week under the new wage code. If you work for 12-12 hours every day, then there is a provision of giving you 3 weeks off by the institute.
Understand the new rule as
For example, if your CTC is 50 thousand, then now your basic will be 15 thousand rupees. According to this, your PF becomes Rs 1800 per month (12% of the basic). But according to the new rule, on CTC of 50 thousand, your basic will increase from 15 thousand to 25 thousand rupees. On this, your PF contribution will increase to Rs 3000 at the rate of 12 percent. That is, you will now get Rs 1200 less per month than before.
Will get more amount on retirement
The effect of increasing the basic salary will be on both your PF and gratuity. Increase in the contribution in both these items will reduce the take home salary. But you will get its benefit at the time of retirement.