Labour Codes

India’s Labour Reforms represent the most significant restructuring of the country’s employment laws since Independence. Guided by the recommendations of the Second National Commission on Labour (SNCL), 2002, the reforms consolidate 29 central labour laws into four comprehensive labour codes designed to simplify and modernise the regulatory framework. This landmark move lays the foundation for a future-ready workforce and stronger, resilient industries driving labour reforms for Aatmanirbhar Bharat.

The new labour codes are effective from 21-Nov-2025.

Recent Notifications

Labour Codes For Central

Central

Code Details

Code Status Published Date Effective Date
Industrial Relations Code, 2020 Final thumbs up 29 Sep 2020 21 Nov 2025

Rule Details

Rule Status Published Date Effective Date
Industrial Relations Rules 2020 Final thumbs up 08 May 2026 08 May 2026

Four types of
Labour Codes in India

User

The Code on Wages, 2019 (CoW)

Establishes a unified structure for wage-related matters, ensuring consistency in wage definitions, minimum wages, payment timelines, and wage fairness across all sectors.

Payroll

The Code on Social Security, 2020 (SS Code)

Integrates social security provisions under one framework, extending protection to organised, unorganised, gig, platform, migrant and fixed-term workers.

Phone

The Industrial Relations Code, 2020 (IR Code)

Modernises dispute resolution, formalises fixed-term employment, defines union representation, and strengthens processes for industrial harmony.

OSH

The Occupational Safety, Health Code, 2020

Consolidates safety, health, and working condition norms with uniform standards on registration, licences, working hours, welfare facilities, and contractor management.

Frequently Asked Questions Related to
Labour Codes In India

(i) Code On Wages

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1. Whether Data Entry Operators and employees in similar categories are included under the minimum wage provisions of the Code on Wages, 2019?

Yes. The concept of scheduled employment has been done away under the Code on Wages. The Code is now universally applicable to all employees, irrespective of their sector or category.

2. Is a daily wage worker not eligible for bonus?

Bonus is payable to every employee who has worked for at least thirty days in an accounting year as per the wage ceiling prescribed by the appropriate government.

3. Will the new concept of floor wage reduce the minimum wages fixed by the State?

No, Floor Wage is a baseline. Where the minimum rates of wages fixed by the State Government earlier is more than the floor wage, the State Government shall not reduce such minimum rates of wages fixed by it earlier.

4. Will the revised definition of wages under the Code, 2019 reduce employee wages?

No. The definition brings transparency and uniformity. Allowances exceeding a fixed percentage as notified by central government are added back to wages, increasing the base for PF, gratuity, and bonus, benefiting workers. It will strengthen social security of employees.

5. Does the Code on Wages allow employers to make too many deductions from worker's wages?

No. The Code caps all deductions at 50% of wages—uniform and protective compared to earlier 75% for cooperative deductions. The deduction are restricted to 50% of wages.

6. Will the fixation of minimum wages become arbitrary under Central Government control?

No. The Central as well as the State Governments will fix minimum wages within their respective jurisdictions. They must set these wages above the floor wage and after consulting workers and employers representatives. So, the process is fair, balanced, and not arbitrary

7. Will the inspector under the Code facilitate only the employers?

No. The duties and powers of the inspector are retained, and he will enforce the provisions, simultaneously raising awareness among workers about their rights and guiding employers in compliance.

8. Is it true that working hours been extended in a way that deprives workers of overtime?

No. Flexibility in working hours will not curtail the minimum wage, and employees working beyond normal hours are entitled to the overtime rate which shall not be less than twice the normal rate of wages.

9. Are transgender persons not provided benefits under the Code on Wages, 2019?

The Employers shall not discriminate on ground of gender including transgender in matter relating to wages, recruitment of an employee for the same work or work of a similar nature and in the conditions of employment.

10. Does compounding of offences allow employers to escape punishment?

No. Deterrent and enhanced penalties are provided under the Code on Wages. Employers are given the opportunity to rectify irregularities; however, compounding is limited to the first offence and a repeat of offence within a period of 5 years is punishable with imprisonment that may extend up to 3 months or fine or with both. This system reduces unnecessary litigation while ensuring that employers cannot evade their responsibilities.

11. Is only permanent employee covered under the Code?

No. The Code covers all employees, including full-time, part-time, temporary, casual and contractual workers.

12. Does the Code on Wages benefit only organized sector workers?

No. The Code on Wages applies to all employees, employed in the organized or unorganized sector. It ensures minimum wages and timely payment. The Code universalizes minimum wages for all categories of employees.

(ii) Code On Industrial Relations

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1. Whether the Industrial Relation Code in any way takes back workers’ right relating to form trade unions?

No. The apprehension is totally incorrect. Provisions related to registration of trade union have been retained under Chapter-III of IR Code 2020.

2. Whether IR Code bans all strikes?

No. The Industrial Relations (IR) Code, 2020 does not ban strikes. Right to strike remains intact under IR Code with mandatory 14 days notice period before going on strike.

3. Whether the worker will need government permission to go on strike in IR Code?

No permission is required from the Government under the IR Code. However, 14-Days prior strike notice will be required which will facilitate both employer and union for immediate resolution of their dispute through timely conciliation leading to reduced their conflict.

4. Whether IR Code allows employers to retrench workers freely?

No. The provisions for mandatory one month notice and retrenchment compensation continue to exist. Prior permission will be required for retrenchment by establishments having 300 or more workers.

5. Is it true that trade unions lose their grievance redressal role?

No. It is not true. Instead Trade Unions get statutory backing in the form of negotiating union/negotiating council under the code thereby strengthening their collective bargaining. The code also provides for bipartite forums like Works Committee and Grievance Redressal Committee, having equal representation will facilitate time bound redressal of grievances of workers.

6. Whether, the Code ends job security for permanent workers and promotes hire and fire?

No. The workers rights and job security remain protected in the IR Code with provisions for mandatory one month notice and retrenchment compensation. Prior permission will be required for retrenchment by establishments having 300 or more workers

7. Is it true that Fixed-Term Employment (FTE) is exploitative?

No. Fixed Term Employees will be eligible for all benefits (EPF, ESI, flexible working hours, timely and minimum wages) equal to permanent employees. They will also be eligible for Gratuity on completion of one year of service. This will reduce contractualisation. Fixed Term Employee will get appointment letter directly from the employer enhancing their pride. This will also increase their employability as freshers can gain experience in a short span of time and enhance specialized skills.

8. Whether the new provisions under IR Code will allow the employers with less than 300 workers to fire without restriction?

No. The requirement for mandatory one month notice and retrenchment compensation for every completed year of service continue. Prior permission will be required for retrenchment by establishments having 300 or more workers. Also, additional provision of re-skilling fund for retrenched workers to enhance their skills to get better job perspective has been introduced for the welfare of the worker.

9. Whether the conciliation mechanism is abolished under IR Code?

No. Rather, the conciliation mechanism have been streamlined and conciliation is now made compulsory in all strike notice and conciliation proceeding shall be commenced on the 1st meeting of conciliation. Fixed time-line, digital process and clear jurisdiction will now facilitate for faster settlement of disputes.

10. Is it true that Labour Courts are being abolished?

The Labour Courts and Industrial Tribunals will be replaced with a simplified two-tier tribunal system reducing delays and multiplicity of forums. Instead of one member the IR Code has introduced two member Tribunals for speedy delivery of justice.

11. Is it true that workers cannot collectively bargain or protest?

No. Mandatory recognition of a sole negotiating union/council strengthens structured bargaining by the workers with their employer.

12. Is it true that Industry closure no longer needs approval?

Lay-off/Retrenchment/Closure have been well regulated under IR Code. Industries having 300 workers on any day of previous year will need prior permission from the Government. All benefits such as retrenchment compensation, priority in reemployment, etc. have been kept under IR Code.

13. Is it true that workers’ participation in management is removed?

Workers’ participation have been ensured through Bipartite forums such as Works Committees and Grievance Redressal Committees under the IR Code.

14. Whether penalty provision for employer violations in IR Code are removed?

No. Penal provisions are not compromised instead penalties have been substantially increased and made commensurate with the offences.

15. Is it correct that IR Code centralizes all labour powers?

No. “Labour” is a concurrent subject under the Constitution of India and its jurisdiction is clearly defined in the codes. The State governments are appropriate government under all the four Labour Codes and they have to exercise their power as appropriate government.

16. Whether abolition of Labour Courts will delay the workers justice?

No. With the provision of 2 member Industrial Tribunal, the justice will be speedily delivered.

17. Whether the Code favours employers only?

No. The code protects the interest of workers through the provisions of negotiating unions/councils, works committee, Grievance redressal committee, requisite safeguards before retrenchment/lay-off and closure and effective dispute resolution mechanism.

18. Whether sales promotion employees are not treated as “employees” and therefore not entitled to labour protections?

No. The sales promotion employees are legally recognized under the definition of ‘worker’ under the IR code.

19. Is it true that the “Journalists” are freelancers and therefore not “employees”?

Working Journalist” employed in a newspaper/agency have now been included under the definition of worker under the IR Code.

(iii) Code On Social Security

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A. General Framework & Registration

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1. Are all procedures under the Social Security Rules mandatory in digital mode?

No. While the Rules prioritise digital processes to ensure transparency and ease of access, physical submission is also permitted in specified cases. For instance, claims relating to gratuity and maternity benefits may be submitted physically in addition to electronic modes.

2. Does registration under the Rules guarantee automatic payment of benefits?

No. Registration is only an entry point that enables workers to access various social security schemes. Benefits are payable only under schemes that are onboarded on the relevant portal (such as the e-Shram portal) and subject to fulfilment of scheme-specific eligibility conditions.

B. Schemes, Rule-Making & Social Security Funds

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3. Can the Social Security Rules be amended only through Parliament?

No. The Rules constitute subordinate legislation. Accordingly, they can be modified, revised, or updated through government notifications, without requiring Parliamentary approval.

4. Can Social Security Funds be merged with general government accounts?

No. The Rules mandate that Social Security Funds be maintained as separate accounts. They also provide for periodic reporting, audit by the Comptroller and Auditor General of India (CAG), and restricted utilisation exclusively for worker welfare.

C. Maternity Benefit Provisions

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5. Can maternity benefit claims be rejected for not using prescribed forms?

No. The Rules clearly state that procedural lapses do not defeat substantive rights. Applications may be submitted physically on plain paper or electronically, and claims cannot be rejected solely due to non-use of prescribed formats.

6. Is certification by a registered medical practitioner mandatory for maternity benefits?

No. The Rules broaden acceptable proof and allow certificates from ASHAs, Auxiliary Nurse Midwives (ANMs), local authorities, and other prescribed village or municipal officials, in addition to registered medical practitioners.

7. Are nursing breaks strictly limited to two fixed intervals?

No. While the Rules prescribe minimum nursing breaks, they also allow additional time, including travel time, depending on the distance to the crèche or childcare facility.

8. Must crèche facilities always be located within the employer’s premises?

No. The Rules permit common crèches, shared or pooled arrangements, and negotiated facilities, particularly to assist smaller establishments. Where crèche facilities are not provided, payment of a crèche allowance is mandated.

D. Gratuity Rules

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9. Can gratuity be claimed only after employment ends?

No. The Rules permit advance submission of gratuity applications where the date of retirement or cessation of employment is known in advance.

10. Does delay in filing gratuity applications lead to forfeiture of claims?

No. The Rules explicitly provide that delay alone cannot invalidate a gratuity claim.

11. How is gratuity payable to minor nominees protected?

The Rules require gratuity amounts payable to minor nominees to be invested in term deposits with specified nationalised banks, ensuring safety and future benefit to the nominee.

12. Do employers have unfettered discretion to reject gratuity claims?

No. The Rules prescribe mandatory notices, reasoned orders, defined timelines, and appeal mechanisms, ensuring transparency and preventing arbitrary decisions.

E. Building and Other Construction Workers’ Welfare

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13. Is BOCW Welfare Cess payable only after completion of construction?

No. The Rules permit advance payment of cess based on self-assessment, with final adjustment upon completion and assessment.

14. Can BOCW Cess be paid in instalments without disclosures?

No. Instalment payments are allowed only with disclosure of work progress and cost assessment, and are subject to verification and scrutiny.

15. Is refund of excess BOCW Cess allowed?

Yes. The Rules provide a time-bound refund mechanism for excess cess deposited, following assessment or appellate orders.

16. Who is responsible for payment of BOCW Cess?

Responsibility is clearly allocated among employers, contractors, government departments, and public sector undertakings, depending on the nature and execution of the construction work.

17. Do construction workers lose welfare benefits when they move across States?

No. The Rules enable inter-State portability of registration and benefits, subject to updation of migrant worker data on the destination State portal.

F. Gig and Platform Workers

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18. Are only direct engagements by aggregators covered?

No. The Rules cover gig and platform workers engaged through subsidiaries, associate companies, holding companies, LLPs, and third-party arrangements.

19. Does failure to update gig worker data permanently disqualify workers?

No. Non-updation leads to temporary ineligibility. Eligibility can be restored upon updating required information on the designated portal.

G. Compliance, Inspection & Enforcement

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20. Are inspections under the Rules routine and random?

No. The Rules emphasise risk-based inspections, corrective directions, and compliance notices with defined timelines before initiating penal action.

21. Are penalties imposed automatically for every non-compliance?

No. The Rules provide for notice, opportunity to comply, hearing, reasoned orders, and compounding of offences before prosecution.

22. Are appeals under the Rules time-bound?

Yes. The Rules prescribe clear limitation periods, standard appeal formats, and timelines for disposal.

H. Exemptions & Trust Governance

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23. Are exempted establishments free from regulatory oversight?

No. Exempted establishments must meet eligibility conditions, audit and reporting requirements, and exemptions may be cancelled upon structural changes.

24. Are trusts managing exempted funds unregulated?

No. The Rules mandate Boards of Trustees, equal employer-employee representation, periodic meetings, and arm’s-length governance norms.

I. Administration & Records

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25. Must all records be maintained only at the workplace?

No. The Rules allow electronic maintenance of records or storage at a notified nearby location, provided they are accessible during inspection.

26. Are the Social Security Rules rigid and inflexible?

No. The Rules explicitly allow revision of limits, forms, contribution rates, and procedures through government notifications, enabling adaptability to emerging needs.

(iv) Code On Occupational Safety, Health and Working Conditions

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1. Whether raising the threshold for definition of “factory” (from 10 workers with power / 20 without power to 20 workers with power / 40 without power) will exclude workers from safety and welfare protections?

No. The rights of workers regarding health, safety and welfare would be protected as these provisions are applicable for the establishments having 10 or more employees.

2. Does increased licensing threshold for contract labour from 20 to 50 will deprive contract workers of protections?

No. All establishments having 10 or more employees must comply with safety and welfare measures. The increases licensing threshold is for administrative ease and does not affect workers’ entitlements/protections.

3. Will allowing flexibility in working hours up to 12 hours per day will exploit workers?

No. The Code prescribes 8 hours per day and 48 hours per week as standard, with some flexibility to extend daily hours with the consent of workers on payment of overtime, at twice the rate wages.

4. Whether it is not unsafe to allow women to work at night?

No. The Code gives women’s right to work in any establishment and night shift with the safeguard of adequate safety, transport, and security arrangements—thus promoting gender equality with safeguards. Moreover, consent of women worker is mandatory to work in night.

5. Will replacing inspectors with inspector-cum-facilitators not weaken the enforcement?

No. The new system of inspection promotes transparent, technology-based inspections while maintaining accountability and facilitating employer ensuring better compliance. Code promotes compliance. Better compliance will ensure better protection to workers.

6. Is it true that health and welfare facilities are limited to large establishments only?

No. The Code mandates health and safety provisions for all workers employed in establishments employing 10 or more employees.

7. Will rationalization of 13 labour laws into one Code, dilute workers’ rights?

No. The Code simplifies and harmonizes provisions with protection of worker rights. Simplification and harmonization remove ambiguities and brings consistence in protection of workers.

8. Whether portability of migrant worker benefits is ineffective and would not reach to beneficiary?

No. The Code requires setting up of Toll free helpline number for Inter State Migrant Worker (ISMW). ISMW can reach to govt through toll free number in case of difficulty faced by them.

9. Will state rule-making powers cause dilution of worker protections?

Labour is in concurrent list of the Constitution. Accordingly, State are allowed to make rules for certain allocated sphere keeping in view of the local conditions and responsiveness to regional needs.

10. Is it true that duties of employers are towards regular workers only and do not cover contract workers and inter-state migrant worker (ISMW) ?

No. The Code does not distinguish regular and contract workers or ISMW. The Code extends benefits to all workers, including contract and inter-state migrant workers.

11. Is it true that allowing women to work in hazardous occupations is unsafe?

No. The Code ensures women’s right to work in any occupation with adequate safety and with sufficient safeguards to promote gender equality

12. Is it true that no protection provided to fixed-term employment workers in the code?

The Code covers all employees, including fixed-term employment workers and they will get all benefits like appointment letters, annual health check-ups etc.

13. Whether OSH & WC Code favours employers by reducing penalties for violations?

No. Rather, penalties have been rationalized and only minor offences are compoundable, while serious safety breaches attract severe penalties including imprisonment.

14. Does OSH Code provide any specific welfare facilities for transgender workers?

Yes. The Code recognizes first time the transgender workers and mandates separate bathing, toilet, restroom etc facilities for them ensuring dignity, privacy and equal access at the workplace.

15. Is there any specific provision for drivers under the OSH Code?

Yes. The Motor Transport Workers including drivers are covered under the Code. The provisions on safety, health and welfare under the Code apply to them, including working hours, rest intervals etc.

16. Are contract workers covered for welfare facilities?

Yes. The Contract workers are covered for welfare facilities which will now be provided by the principal employer.

17. Is it true that stuntmen and dubbing artists are not provided any benefits under the OSH Code?

No. Under the definition of “audio-visual worker” in the Code, stuntmen and dubbing artists are also covered and will get the safety, health and welfare benefits provided to audiovisual workers.

18. What is the minimum criterion in terms of number of days for a worker to be eligible for annual leave with wages as per the provisions of OSH&WC Code, 2020?

A worker should have worked for 180 or more days in a calendar year to be eligible for annual leave with wages.

19. Whether contract labour worker be issued an experience certificate?

Yes, a contract worker can demand from concerned contractor to issue experience certificate.

Key Features of

The Code on Wages

Legislative Consolidation

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

Highlights of Code on Wages effective 21-11-2025

  • Universal Coverage: Uniform applicability across all employees and sectors.
  • Bonus Recalibration: Aligns bonus calculations with the unified wage definition.
  • Gender-Neutral Wages: Ensures gender-neutral wage and opportunity standards.
  • Standardised Payment Timelines: Mandates monthly wage payment by the 7th, and requires final settlement within two working days of termination or resignation.
  • Stronger Penalties & Accountability: Imposes higher penalties and strengthens enforcement.
  • National Floor Wage Alignment: Introduces a Central floor wage guiding State minimum wages.
  • Digital-First Compliance: Requires e-registers, e-wage slips, and digital inspections.
  • Streamlined Dispute Resolution: Compliance consequences for employers.

Immediate Operational Implications

  • Higher CTC & Statutory Costs: The 50% wage rule increases the wage base, raising PF, ESI, and gratuity outflows.
  • Increased Gratuity & PF Liability: Larger wage components drive higher long-term gratuity obligations and PF contributions.
  • Salary Structure Re-Alignment: Employers must restructure wages, allowances, incentives, and commissions to comply with the Code.
  • Payroll & Payment Process Changes: Earlier wage timelines, digital wage slips, and unified registers require payroll/HrMS updates.
  • Greater Contractor & Vendor Oversight: Stricter responsibility for contractor wage compliance demands stronger audits and monitoring.

Wages - A Single standard definition across all codes

  • Includes: Basic Pay, Dearness Allowance (DA), Retaining Allowance (rare—paid in seasonal industries to retain workers)
  • Exclusions: House Rent Allowance (HRA), Statutory bonus, Overtime allowance, Commissions & Incentives, Employer PF/ESI Contributions, Conveyance allowance, Special allowances, Value of utilities or services, Leave encashment, Gratuity, Traveling allowances, Any reimbursementtype payments
  • All excluded components together cannot exceed 50% of the total CTC. If exclusions exceed 50% of the total remuneration: The excess amount is added back into “wages” as conditional inclusions.
  • Sample Illustration:
    Lets Assume Total CTC is₹50,000
    A. Allowances (70%) is₹35,000
    B. Core Wages (30%) is₹15,000
    As per the 50% rule:
    Maximum allowed exclusions:₹25,000
    C. Excess Added Back to Wages:₹10,000
    Final Wage as per Code will be (B+C)₹25,000
    *Statutory benefits in respect of above illustration will be computed on ₹25,000 Only

Advisory Boards and Closure

  • The code proposes the establishment of central and state advisory boards, comprising representatives of employees, employers, and independent persons, to advise on various matters including minimum wages, and working hours.

Inspection and Compliance

  • The code introduces an inspector-cum-facilitator approach to ensure compliance. This aims to promote ease of compliance and reduce the inspector raj (inspector dominance).

Grievance Redressal

  • It provides a mechanism for workers to raise disputes regarding wage payments, and specifies a 3-year time limit for filing claims related to wage disputes.

Penalties for Non-compliance

  • The code outlines penalties for employers failing to comply with its provisions. These penalties vary based on the nature and severity of the non-compliance.

Objectives

Simplification

Simplification

Consolidate and streamline existing laws to make them more comprehensible and less burdensome.

Flexibility

Flexibility

Provide flexibility to employers while ensuring workers' rights and welfare.

Dispute Resolution

Dispute Resolution

Establish clear mechanisms for the resolution of industrial disputes.

Worker Protection

Worker Protection

Safeguard the interests of workers through provisions on standing orders, notice periods, and compensation.