7th Pay Commission: Central Government Employees' monthly take home salary may change from April 2021

7th Pay Commission (7th CPC) latest news: The monthly take home salary of the central government employees may change from 1st April 2021. This change in the monthly take home salary of the Central Government Servants (CGS) may become a reality if the Central Government implements the new wage code that it had announced in the Budget. This change in the monthly take home salary of the CGS has been looming after the Finance Minister Nirmala Sitharaman announced the new Wage Code in her budget 2021, which got further indication from the Secretary Labour & Employment Apurva Chandra while elaborating upon the budgetary allocation and provisions last week in New Delhi.  

After the implementation of the new Wage Code, monthly Provident Fund (PF) contribution and Gratuity contribution of the central government employees may change from 1st April 2021. The new wage code has the provision to have one's basic salary at least 50 per cent of one's net monthly CTC. Means, if the new wage code gets implemented from 1st April 2021, then central government employees monthly allowance can't be more than 50 per cent.

"This (The) Ministry would soon be in a position to bring into force the four Codes, viz., Code on Wages, Industrial Relations, Occupational Safety, Health and Working Conditions and Social Security Codes," said Apurva Chandra, Secretary, Labour & Employment. He said that all stakeholders are also consulted in the framing of rules.

As one's monthly PF contribution and Gratuity is a part of one's monthly basic salary. After the implementation of the new wage code will lead to change in one's monthly PF and Gratuity contribution. However, it is yet to be revealed whether the wage code gets implemented from 1st April 2021 or not as the centre is still to make any deadline for implementation of the new wage code.

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Finance Minister Nirmala Sitharaman had announced the new wage code in her Union Budget 2019 and after that, the central government is yet to implement it. But, some media reports are claiming for implementation of the new wage code after the recent announcement by the Secretary Labour & Employment in this regard.

Since the central government is in the process of finalising the wage code, it is not clear whether the monthly salary of a government or a private employee (having EPF account) will go up or down due to new monthly contribution of the PF, EPF and Gratuity, but it's for sure that one's PF, EPF and Gratuity contribution will change. And this change will lead to change in one's monthly take home salary.

This change in Provident Fund (PF) may also impact private sector employees' EPF passbook balance as the new wage code that is likely to get implemented from 1st April 2021.