siliconindia | | DECEMBER 20258WHAT HAPPENS WHEN WORK, TIME, AND PAY GET REWRITTEN OVERNIGHT? EDITORIAL EXCLUSIVEBy M R Yuvatha, Senior Correspondent, SiliconindiaOn 21 November 2025, India quietly flipped one of the biggest switches in its 75-year labour history. Four new Labour Codes on Wages, Industrial Relations, Social Security, and Occupational Safety, Health & Working Conditions replaced 29 old laws. For the first time since Independence, every worker whether in a glass-and-steel office, a construction site, a Swiggy delivery fleet, or a village brick kiln is covered under a single, modern framework.The headlines scream `take-home salary will fall'. That is only half the story. The other half is that India is forcibly moving from a low-basic, high-allowance culture to a high-basic, high-retirement-security culture.Whether you like it or not, your CTC is about to be rewired.Mandatory appointment letters, universal minimum wages, and pan-India social security coverage (including ESIC expansion) ensure greater formalisation. This strengthens worker confidence -critical for skill-intensive manufacturing such as fabs, ATMP, component manufacturing and design centres" says, Ashok Chandak, President, IESA and SEMI India.The 50% Basic Salary RuleThe Code on Wages mandates that wages (basic + dearness allowance + retaining allowance) must be at least 50% of the total CTC. Today, many private-sector employees have basic salaries as low as 25-35% of CTC, with the rest parked in tax-friendly allowances (HRA, LTA, special allowance, etc.). Companies loved it because PF (12%) and gratuity were calculated only on basic, keeping their liability low. Employees loved it because take-home was higher. That party is over.Example: Current CTC Rs 15 lakh Basic: Rs 4 lakh (27%) PF contribution Rs 48,000/year New structure (after 50% rule) Basic: Rs 7.5 lakh PF contribution jumps to Rs 90,000/year Take-home drops by roughly Rs 3,000-Rs 4,500 per month (assuming employer does not increase CTC).Gratuity Gets a Turbo BoostGratuity is calculated as (Last drawn basic + DA) × 15/26 × years of service. Because basic will now be higher, gratuity payouts will shoot up sometimes by 50-80%. Fixed-term contract workers (earlier ineligible) now get gratuity after just one year instead of five.Gig & Platform Workers Finally Enter the SystemSwiggy, Zomato, Urban Company, Ola, Dunzo every aggregator must now contribute 1-2% of annual turnover · Basic salary 50% of CTC increases PF and gratuity but reduces immediate pay.· Platform and contract workers now get social security and retirement benefits.· Four new codes simplify laws, ensure minimum wages, gender pay parity, and better leave, overtime, and safety norms.
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