Indian Government mulling four-day work week law: Impact on salary disappoints

The new labour laws will make you work 12 hours daily with a reduced take-home salary. The government also is also gearing up for significant changes in many aspects especially in working hours, take-home salary, employee's provision fund (EPF), contributions, annual leaves, and other areas.

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The primary objective of labour laws is meant to function in the interest of employees and safeguard them from any possible abuse from employers. However, the new labour laws that the government of India is a kind of a mixed bag for employees.

A slew of new labour laws will be implemented by the Central government starting July 1, 2022. If all goes according to plan, there will likely be significant changes in working hours, take-home salary, employee’s provision fund (EPF), contributions, annual leaves, and other areas.

Although rumours are making rounds that the new labour laws will come into effect next month, no official notification has been issued yet. The government of India is highly optimistic about increased investment in the country and more employment opportunities that would be created once these new labour laws are in practice.

The biggest change that will affect the work-life balance and day-to-day routine of employees will come in a form of a four-day work week. The new labour laws will require employees to work four days rather than five. However, in a bid to strike out a balance between employees and employers, the farther ones will have to work 12 hours a day on all four days.

To avoid any objection to the new labour law from the companies, the labour ministry made it clear that the 48-hour work week requirement must be met if the proposal is approved. This will apply to all industries, but it may vary from one state to the next, depending on state laws.

This provision could also refer to three weekly offs in a row, which would most likely be Friday, Saturday, and Sunday.

New Labour Laws: Impact on Salary

From the employees’ perspective, the new labour laws also have concerns because once they are implemented, there will be a decrease in take-home pay. However, the provident funds will be more heavily borne by the firms.

It’s proposed that the basic salary for employees must be half of their gross salary, as per new laws. This will raise the PF contributions of both the employee and the employer.

The government also sought to simplify the amount of leave that workers can take during their employment. These policies include the ability to carry forward leave into the next year, and the ability to cash out leave during the tenure. The new labour laws have also reduced the requirement for leave from 240 days to 180 days in a year.

The quantum of leave earned will not change, which is 1 day for every 20 work days. Besides, like before, employees can carry forward leaves which currently stands at 30 days.

The fundamental objective of new labour laws is to provide employees with more time for personal activities and family in a single stretch. A four-day week, followed by three days of leave, will also help employees strike a perfect work-life balance. However, the effect of longer working hours on the productivity and capabilities of employees is yet to be seen.


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