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Good News to private employees: Minimum Basic salary of private employees to rise?, Know Full Information Below

According to the new Wage Code rules, the basic salary of the employees should be 50% of the total salary or the Cost to Company (CTC).



After the implementation of the new wage code, there will be several major changes for the salaried employees, with the biggest impact likely to be on their salary. It is being estimated that after the implementation of the new wage code, the take-home salary of the employees will decrease. However, there is also a discussion that the basic minimum salary of the employees may be increased.

According to the new Wage Code rules, the basic salary of the employees should be 50% of the total salary or the Cost to Company (CTC), and not less than this. At present, most companies keep the basic salary of the employees low and the number of allowances remains high. But as soon as the new wage code is implemented, the existing system will change completely. Companies will have to keep 50 percent or more of the basic salary of the employees’ CTC. In the remaining 50 percent, all the allowances being received by the employees will be counted.

In such a situation, the contribution of employees in PF and gratuity will increase but take-home salary will decrease. The labor unions were demanding that the minimum basic salary of the employees should be increased under the new rules. If this happens, the salary of the salaried class working in private companies will increase. According to the existing rules, PF is not mandatory for employees earning more than Rs 15,000 per month. If the salary is more than Rs 15,000, the contribution of PF on the actual salary is voluntary on the part of the employer and the employee. Meaning they contribute if they want and don’t if they don’t want.


The new wage code was set to be implemented from April 1 this year, but it was postponed as some states are not yet ready to implement it. But now it can be implemented in October. When the new Wage Code is implemented, there will be a big change in the salary structure of the employees. The Parliament on August 2019 changed the rules related to three labor codes, industrial relations, safety of work, health and working conditions, and social security. These rules were passed in September 2020.

Parvesh Maurya
Parvesh Maurya
Parvesh Maurya, has 5 years of experience in writing Finance Content, Entertainment news, Cricket and more. He has done BA in English. He loves to Play Sports and read books in free time. In case of any complain or feedback, please contact me @ informalnewz@gmail.com
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