New Labour Codes Effects From July 1st: Key changes in Annual Leave, Working Hours

New Labour Codes Effects From July 1st: Key changes in Annual Leave, Working Hours

In all likelihood, the new labour codes enacted by the Central Government had gone into effect on July 1, 2022. There are enormous changes in all industries and areas, as well as in how we operate, accordingly to the new labour law in India 2022.  In the new labour codes, everything from employee working hours to provident funds and compensation structures is altered dramatically.

According to the new labour law in India 2022, the new labour code will have implications on wages, social security (pension, gratuity), labor welfare, health, safety, and working conditions (including that of women).

The definition of the term “wages” is crucial since the labour laws seek to bring about consistency in this meaning throughout all four codes. This might have a considerable financial impact on organizations, particularly with regard to gratuities.

Is the new labour codes effect in India in 2022?

On July 1, the new labor law in India 2022 went into effect nationwide. The in-hand income, the number of days off each week, and the daily work hours might all alter as a result of this adjustment. India’s federal government has established four codes, which the individual states are free to apply as they see fit. States such as Uttarakhand, Madhya Pradesh, Chhattisgarh, Odisha, Arunachal Pradesh, Haryana, Jharkhand, Punjab, Manipur, Bihar, Himachal Pradesh, and the Union Territory of Jammu and Kashmir have imposed new labour codes.

These are the following new labour code 2022:

  • Working Times

This is the first new labour code 2022. Working hours for employees in all industries will change dramatically. Working hours are now based on the Factories Act of 1948 at the national level for workers in factories and other similar enterprises. For office workers and other employees, it is controlled by the Shops and Establishment Acts of each state.

According to the new labour codes 2022, daily working hours are limited to 12 hours, while weekly working hours are limited to 48 hours. This means that businesses/factories can work four days a week. Across industries, overtime has been increased from 50 to 125 hours every quarter.

  • Employee Salary Structure

According to the new labour codes 2022, an employee’s basic wage must be at least 50% of his or her gross salary. As a result, employees will make greater contributions to their EPF accounts, and gratuity deductions will increase, lowering most employees’ take-home pay.

  • Count of leaves

The new labour code 2022 also specifies the number of annual vacations will stay the same, but employees will now receive a leave for every 20 days of work rather than 45, which is welcome news. Furthermore, instead of the current 240 days of work, new workers will be entitled for leaves after 180 days of employment.

  • Contributions to the Provident Fund

Another significant shift brought about by the new labour code 2022 in India is the ratio of take-home pay to employee and employer contributions to the Provident Fund. The employee’s basic wage must be 50% of his or her gross income. Employee and employer PF payments will raise, but take-home pay will fall, particularly for those working in the private sector.


The new labour code 2022 had gone into effect across the country on July 1. This modification may result in variations in the starting wage, weekly off, and daily working hours. The Indian government has established a few codes that states can execute as they see fit.

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