Alert for all employees! Your take home salary may fall starting from April 1 - this is the reason

There are several changes set to happen from then next Financial Year, beginning April 1. One of these changes that is likely to happen from April 1 may well reduce your take-home salary. This will be massive, as these changes will affect private sector and public sector employees alike.  

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In fact, the Government is set to field New Wage Code, which will affect entire salary structure of an employee. It will also give flexibility in working hours.  

As per the New Wage Code,  the minimum wages must account for half of an employee's CTC. Employee benefits such as leave travel, house rent, overtime, and transportation would have to be reduced to the remaining 50% of CTC. According to the new regulations, the allowance portion of the total salary or compensation cannot exceed 50% of the total salary or compensation, which means that the basic salary must be 50%.

As per the Code of Wages, the take-home salary of an employees is likely to come down as the contribution to provident fund (PF) and gratuity are to be increased.   A rise in gratuity and the provident fund would increase the amount of money received after one's retirement.

What does New Wage Code Bill entails?
- Basic salary has to be 50 per cent of the total salary.
- A break of 30 minutes would be mandatory after every five hours of work.  
- Over five hours of continuous work is prohibited.  
- Over 15 minutes of work would qualify as overtime. Currently, less than 30 minutes of work after the working hours is not considered overtime.