The Government has merged 29 labour laws into four consolidated labour codes with the twin objectives of improving ease of business and strengthening worker protections.
The new framework, notified on November 21, brings significant changes to wage regulation, industrial relations, social security and workplace safety, and is expected to impact more than 40 crore workers across the formal and informal sectors.
The four codes — the Code on Wages, the Industrial Relations Code, the Social Security Code and the Occupational Safety Code — introduce measures such as universal minimum wages, gratuity after one year for fixed-term employees, equal treatment for women in the workplace, expanded social security coverage and clearer provisions on working hours and overtime. Below are the key highlights.
The Code replaces four earlier Acts and seeks to bring uniformity to wage-related rules.
• Universal minimum wages: Minimum wages become a statutory right for all employees, including those in the unorganised sector.
• National floor wage: A government-set floor wage will guide states, which cannot fix wages below this benchmark.
• Wage criteria: Wages will be set based on skill levels, geographical zones and working conditions.
• Gender equality: Employers must not discriminate by gender, including transgender identity, in recruitment, wages or working conditions.
• Overtime pay: Overtime must be compensated at twice the standard rate.
• Universal coverage: All employees are entitled to timely wage payment and protection against unauthorised deductions.
• Penalties and decriminalisation: First-time non-serious offences may be compounded with monetary penalties; several offences have been shifted from imprisonment to fines.
This code consolidates laws related to trade unions, standing orders and industrial disputes.
• Fixed-term employment with parity in wages and benefits, along with gratuity after one year.
• Re-skilling fund providing 15 days’ wages for every retrenched worker.
• Recognition of a negotiating union with 51 percent membership, or a negotiating council where no single union qualifies.
• Expanded definition of worker to include journalists, sales promotion staff and supervisors earning up to ₹18,000 a month.
• Higher threshold for layoffs, retrenchment and closure approvals increased from 100 to 300 workers.
• Mandatory 14-day strike notice for all establishments.
• Work-from-home permitted in service sectors by mutual consent.
• Two-member industrial tribunals for quicker dispute resolution.
This code merges nine Acts to expand social protection across employee categories, including gig and platform workers.
• ESIC coverage extended nationwide without the earlier “notified area” limitations.
• Five-year limit for initiating EPF inquiries, to be concluded within two years.
• Reduced EPF appeal deposit requirement to 25 percent.
• Creation of a Social Security Fund for unorganised, gig and platform workers.
• Clearer definitions of wages, dependents and work-related accidents, including commute-related injuries.
• Gratuity eligibility for fixed-term employees after one year of continuous service.
This code brings together provisions from 13 Acts to improve workplace safety and health.
• Women can work across all sectors, including night shifts, subject to consent and safety measures.
• Free annual health check-ups for employees.
• Working hours capped at eight hours a day and 48 hours a week; overtime requires consent and double wages.
• Expanded definition of inter-state migrant workers, covering direct, contractual and self-migrating workers.
• National database of unorganised workers for easier access to jobs and welfare schemes.
• Mandatory appointment letters to improve transparency.
• Courts may direct at least 50 percent of fines to injured workers or their families.
• Safety committees required in establishments with 500 or more workers.
(By arrangement with livemint.com)