New Delhi: With the implementation of the new labor law, there will be several changes in the salaries of employees. It is learned that the basic salary will increase even though the salary received is less. The basic salary of an employee should be 50% of the total salary or Cost to Company (CTC). This should not be underestimated. At present, most companies pay lower salaries to their employees and higher allowances.
With the implementation of the new labor law, the existing system will be completely changed. Employees are required to pay 50 per cent of the CTC as basic salary. The remaining 50 per cent will be treated as allowances. In such a scenario, the PF and gratuity share will increase but the take-home salary will decrease. Under the new law, the unions demanded that the minimum basic wage be raised from Rs 15,000 to Rs 21,000.
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If this is implemented, the salaries of those working in private companies will also increase. Under the existing rules, PF is not mandatory for employees earning more than Rs 15,000 per month. But if the salary is more than Rs 15,000, PF is mandatory. The employer and the employee must pay the PF share. The new labor law was set to take effect on April 1 this year. But the date was extended as some states were unwilling to implement it. It is reported that the new labor law will be implemented in October.