The Code on Social Security, 2020 is not expected to be implemented in this financial year due to the delay in the drafting of rules by the states and also for political reasons.

The four codes have already been passed by Parliament. For implementation of these codes, rules under these must be notified by Central as well as State governments for enforcing those in respective jurisdictions. Labour is a concurrent subject under the Constitution of India and therefore both the Centre and states must notify rules to make them laws.

Once notified, it is expected that the rules would take some time to be executed and employers would be given a time of three months approximately to comply with the provisions.

The implementation will result in reduction in take-home pay of employees and firms will have to bear higher Gratuity and Provident Fund liability.

For more information on the New Wage Bill and how it will affect your organization, please visit our earlier detailed article on it by clicking the link below:
“New Wage Code update”