New Delhi, December 4 (IANS). India’s new labor codes substantially strengthen social security coverage and worker protections, while reducing the compliance burden for employers. This came to light in the report of credit rating agency Brickwork Ratings on Thursday.
According to the report, these reforms are a step towards a more inclusive, modern and competitive labor ecosystem that strikes a balance between worker welfare and industrial efficiency.
The report said higher thresholds for restructuring (retranchement) approvals and simplification of compliance processes reduce regulatory burden, thereby promoting an investment-friendly environment. Digital filing, reduction in administrative processes and flexibility in workforce management also provide relief to industries.
Although gig platforms will have to bear new social security costs, workers in this sector will gain formal worker status for the first time. The limit for businesses to be allowed to reduce headcount has been increased to 300 and compliance rules have been simplified.
Key changes under this include universal minimum and floor wages, gender equal pay, overtime payment at double the normal rate, formal status of fixed-term employment, re-skilling fund, recognition of work-from-home, 60-day strike notice requirement and restructuring limit up to 300 employees under the Industrial Relations Code.
According to the report, fixed term employees will get the benefit of gratuity after one year of service. At the same time, the trade union that gets 51 percent votes will get special negotiating rights in industrial establishments.
Under the Social Security Code, 2020, gig and platform workers have been included under the ambit of social security schemes like EPFO, ESI and gratuity. National social security coverage is projected to increase to 64 percent of the total workforce by 2025, from just 19 percent in 2015.
Compliance has become further simplified through single registration/licensing, digital register and inspector-cum-facilitator system under the new labor codes.
The four integrated labor codes have come into effect from November 21 by subsuming 29 old labor laws on wages, industrial relations, social security and occupational safety, health and working conditions.
–IANS
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