Context:

• The Central Government implemented four Labour Codes from 21 November 2025 with the objective of simplifying and making the labour laws efficient, through which 29 existing labour laws will be simplified and streamlined.

Codes:

• Wage Code, 2019: Related to wages, minimum wages, bonus and equal remuneration
• Industrial Relations Code, 2020: Related to trade unions, settlement of industrial disputes, and conditions of employment
• Social Security Code, 2020: Related to Employees' Provident Fund (PF), Employees’ State Insurance (ESI), gratuity, maternity benefits and pensions
• Occupational Safety, Health and Working Conditions Code, 2020: Related to workplace safety, health and working conditions
• Notification:
• The Wage Code, 2019 was notified on 8 August 2019 and the remaining three codes were notified on 29 September 2020.

Wage Code, 2019

• Objective: To bring reforms in India's labour laws
• It simplifies and integrates the provisions of four old laws, ensuring protection of workers' rights while making compliance easier for employers.

Earlier Acts Merged:

• Payment of Wages Act, 1936
• Minimum Wages Act, 1948
• Payment of Bonus Act, 1965
• Equal Remuneration Act, 1976

Main Objectives:

• Empowerment of workers: Strengthening the rights of all workers regarding wages and bonus
• Ease of compliance: Bringing uniformity and simplicity in wage-related rules for employers

Major Provisions and Features

Universal Right to Minimum Wages:

• This code universalizes the statutory right to minimum wages for all employees in both organised and unorganised sectors.
• Earlier situation: Minimum Wages Act applied only to specific “scheduled employments”, covering only a small portion of the labour force.
• Statutory National Floor Wage:
• The Central Government will prescribe a statutory minimum wage (‘floor wage’) based on the minimum living standard of workers, considering regional disparities.
• Obligation on States: No State Government can fix minimum wages lower than the national floor wage, ensuring adequacy and uniformity across the country.

Overtime Compensation:

• If an employee works beyond regular hours, the employer must pay at least twice the normal wage rate.

Decriminalisation of Offences:

• First-time minor offences have been decriminalised (no imprisonment).
• Instead, monetary penalties (up to 50% of maximum fine) have been provided to promote compliance rather than punishment.

Industrial Relations Code, 2020

• Primary Objective: To simplify, consolidate and rationalise existing laws related to trade unions, employment conditions and industrial dispute resolution.

Earlier Acts Merged:

• Trade Unions Act, 1926
• Industrial Employment (Standing Orders) Act, 1946
• Industrial Disputes Act, 1947

Key Provisions & Innovations

Fixed Term Employment (FTE):

• Allows hiring of employees for a fixed duration through direct contracts.
• Equality ensured: FTE workers will receive the same wages, benefits and allowances as regular employees (including statutory leave).
• Gratuity eligibility: FTE employees become eligible for gratuity after completing 1 year of service.
• Benefit: Discourages excessive contractualisation while providing operational flexibility to employers.

Re-skilling Fund:

• Objective: To train retrenched employees with new skills.
• Employer contribution: Industrial establishments must deposit an amount equal to 15 days’ wages for every retrenched worker into this fund.

Recognition of Trade Unions & Negotiation Process:

• Negotiating Union: A trade union will be recognised as the sole negotiating union only if it has at least 51% membership.
• Negotiating Council: If no union has 51%, a council will be formed from unions with at least 20% membership.
• Benefit: Strengthens collective bargaining.

Tribunals for Quick Dispute Settlement:

• Two-member tribunals with judicial & administrative members
• Direct approach: Parties can directly approach the tribunal within 90 days if conciliation fails.

Mandatory Notice for Strikes & Lockouts:

• 14-day notice is required for all establishments before any strike or lockout.
• Expanded definition: “Mass casual leave” is also considered a strike to prevent sudden disruptions.

Representation of Women Employees:

• Complaint redressal committees must have proportional representation of women to address gender-sensitive matters.

Social Security Code, 2020

• Objective: To broaden and simplify the delivery of social security benefits across India.

Earlier Nine Central Acts Consolidated:

• Employees’ Compensation Act, 1923
• Employees’ State Insurance Act, 1948
• EPF & Miscellaneous Provisions Act, 1952
• Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959
• Maternity Benefit Act, 1961
• Payment of Gratuity Act, 1972
• Cine-workers Welfare Fund Act, 1981
• Building & Other Construction Workers Cess Act, 1996
• Unorganised Workers Social Security Act, 2008

Key Innovations & Expansions

Coverage of Gig & Platform Workers:

• The Code extends social security to gig and platform workers who were previously excluded.
• New definitions: ‘Aggregator’, ‘gig worker’, ‘platform worker’
• Contribution: Aggregators will contribute 1%–2% of annual turnover (not exceeding 5% of the payments made to such workers).

Expanded ESIC Coverage:

• ESIC scheme applicable across India, removing the earlier “notified areas” restriction.
• Voluntary enrolment: Establishments with fewer than 10 workers can voluntarily join ESIC.

Uniform Definition of ‘Wages’:

• Includes basic wage, dearness allowance and retaining allowance.
• If allowances exceed 50% of total remuneration, excess will be added back into wages.
• Benefit: Transparency in PF, gratuity and other calculations.
• Gratuity for Fixed Term Employment:
• FTE employees become eligible after one year (earlier five years).

Time-bound EPF Inquiry:

• EPF inquiries must begin within 5 years.
• Once initiated, they must be completed within 2 years (extendable by 1 year).
• Suo moto powers removed.
• Dedicated Social Security Fund:
• For unorganised, gig and platform workers covering life, disability, health and old-age benefits.
• Funded through compounding fees collected from labour violations.

Occupational Safety, Health and Working Conditions Code, 2020

• Objective: To ensure safe work environment and health standards for workers in India.
• Merges 13 Central labour laws into one.
• Eliminates multiplicity of laws and brings uniformity across industries and States/UTs.

13 Acts Merged:

• Factories Act, 1948
• Plantation Labour Act, 1951
• Mines Act, 1952
• Working Journalists & Other Newspaper Employees Act, 1955
• Working Journalists (Fixation of Rates of Wages) Act, 1958
• Motor Transport Workers Act, 1961
• Beedi & Cigar Workers Act, 1966
• Contract Labour (Regulation & Abolition) Act, 1970
• Sales Promotion Employees Act, 1976
• Inter-State Migrant Workmen Act, 1979
• Cine Workers & Cinema Theatre Workers Act, 1981
• Dock Workers (Safety, Health & Welfare) Act, 1986
• Building & Other Construction Workers Act, 1996

Key Features

Simplified Registration & Compliance:

• Single electronic registration instead of six separate registrations under earlier laws.
• Uniform threshold: 10 workers for registration.
• Ease of Doing Business: Centralised database enhances compliance.

Expanded Safety Standards:

• Government may apply provisions to any establishment (even with 1 employee) if engaged in hazardous activities.

Protection of Migrant Workers:

• Broader definition of Inter-State Migrant Workers to include directly hired, contractor-hired, and self-migrating workers.
• Establishments must declare the number of ISMW.

Formalisation & Transparency at Workplace:

• Appointment letters: Mandatory for all employees with clear job details, wage structure and social security benefits.

Promotion of Women’s Employment:

• Women can be employed in all establishments.
• Allowed to work at night with their consent and adequate safety measures.

National Database & Welfare Fund:

• National database of unorganised workers (including migrants) will be developed.
• Dedicated welfare fund for unorganised workers funded through fines & compounding fees.

Reforms in Contract Labour:

• Threshold increased from 20 to 50 workers.
• Licensing simplified; all-India licence valid for 5 years; some licences auto-generated.
• Advisory board replaced by designated authority for main & ancillary activity matters.

Work Hours & Safety Committees:

• 8 hours/day and 48 hours/week work limit.
• Overtime only with consent; payment at double rate.
• Establishments with 500+ workers must form joint safety committees.

Integration of Advisory Boards:

• A National Occupational Safety & Health Advisory Board will replace earlier six boards; tripartite body.

Welfare & Wage Liability for Contract Workers:

• Principal employer responsible for welfare (health, safety) of contract workers.
• If contractor fails to pay wages, principal employer must pay pending wages.