The Modi government is preparing to implement four new labor codes. But two of these are entangled in some provisions of the Labor Code. According to the Indian Express, concerns have arisen among companies and industry representatives regarding the Code on Wages and the Code on Social Security.
A proposed provision in the Wages Code to limit basic pay to 50 percent of total pay, which effectively reduces take-home pay, but increases contributions to Social Security components such as the Employees’ Provident Fund. The government is considering this proposal. The changes in the definition of wages proposed in the Code have been conveyed to the Union Labor Ministry and those inputs are being taken into account.
At the same time, the screw is stuck in the code of social security. The Labor Ministry has held meetings with representatives of gig and platform aggregators who have pushed for redefining the definition of turnover. According to The Code on Social Security, aggregators employing gig workers are required to contribute 1-2 percent of annual turnover to Social Security, with the total contribution not exceeding 5 percent of the amount paid by the aggregator.
A senior government official told The Indian Express, “If there are issues like wage provision, we are ready to reconsider whether allowances can be more than 50 per cent. Some are saying that incentives and bonuses are given. So they are being monitored. The concerns should be resolved and we are trying to build a consensus on all issues.
“They are saying that their turnover does not include only gig workers. They have employees running online platforms, for warehousing, for delivery. That’s why he said that turnover cannot be looked at one by one. So we have asked them to give detailed information and we are ready to resolve the issues.”