Salary of all jobs in the country will go down from next year, know what is the policy of Modi government?
Salary cut is going to be made from next year. However the company will have to pay you more. People will be shocked to hear this. However, in the long run, employees will benefit greatly. From next year, the salary structure will be radically changed.
Now the emphasis will be on social security as in developing countries. The effect will be that the Salary in your Bank Accounts will be lower. But the company will have to pay more in your PF and Gratuity.
From next year, companies will restructure the Pay Package under the Central Government’s New Wage Code. The New Compensation Rule is expected to take effect in April 2021. This is part of the Wedge Code 2019. Under the new rule, the allowance component does not exceed 50 per cent of the total salary or allowance component. Simply put, the basic salary of employees should be at least 50 percent. Under the new rule, the provident fund will also come into effect on the graduate component from April 1, 2021.
The bill was passed in Parliament last year. The impact of the Corona virus epidemic on companies can be seen in this situation. The Central Government will notify this after receiving public feedback. Under the new rule, employees’ gratuity and provident fund contributions will increase. But the celery that comes in handy can be a little low.
The implementation of this rule will change the payment structure offered to employees by most companies. These companies usually have a small share of non-allowance. In some cases, this is much less than 50 percent. But now the company’s contribution to the employees’ provident fund will increase.
The increase in contributions to the provident fund will reduce the take home salary. The good news, though, is that even if the take-home salary goes down, the funds you get after retirement will go up.
At present most of the companies have higher allowance as compared to basic salary. This is the reason why private sector employees will be most affected after the implementation of the new rule by the central government.