Labour codes draft rules notified, implementation likely in 3 months
The government on Tuesday pre-published separate draft rules for all four labour codes—the Code of Wages (2019), the Industrial Relations Code (2020), the Code on Social Security (2020), and the Occupational Safety, Health and Working Conditions Code (2020)—seeking objections and suggestions from the public within the next 45 days.
The extensive and detailed draft rules for the four codes, which were notified on November 21 and rationalise 29 existing labour laws, were issued in the Gazette on Tuesday. The draft rules for the Code on Wages run into 111 pages, while the most voluminous set pertains to the Code on Social Security, spanning 270 pages. The objections and suggestions from persons and stakeholders will be incorporated while finalising rules of the four codes.
Labour and Employment Secretary Vandana Gurnani had said in an exclusive interview to businessline on November 27 that it would take about 90 days from the publication of the draft rules for the codes to become operational.
“The rules have been pre-published in the past as well, comments taken, finalised and kept ready. However, the legal requirement is that since some time has lapsed since they were pre-published, the process has to be exhausted again. The rules pertaining to all four labour codes will be pre-published again during the course of the next one week or 10 days. Another 45 days will be available for people to give comments, and another 45 days or so will be needed to finalise them,” Gurnani had said.
While the exercise at the Centre is expected to be completed within the next three months, states may take longer, as they will have to follow their respective processes for rolling out the labour codes.
According to the Ministry, the implementation of the labour codes—by modernising labour regulations, enhancing workers’ welfare and aligning the labour ecosystem with the evolving world of work—lays the foundation for a future-ready workforce and stronger, more resilient industries, driving labour reforms for Aatmanirbhar Bharat.
Major benefits of the four labour codes, as outlined by the Ministry, include: common provisions across labour codes, uniformity in definitions across all codes, introduction of a web-based inspection system to ensure transparency and accountability, Inspectors redesignated as Inspector-cum-Facilitators to promote compliance and eliminate “inspector raj”, provision for compounding of offences, de-criminalisation of offences, replacing imprisonment with civil penalties such as monetary fines for first-time offences.
They also offer simplified compliance through a single licence, single registration and single return system, and removes gender-based discrimination, including against transgender persons, in recruitment, wages or working conditions. Besides, codes allows greater opportunities for women, including permission to work in all sectors and night shifts, subject to consent and safety measures.
1. Code of Wages, 2019
Minimum wages become a statutory right for all employees in every sector, organised or unorganised.
Introduction of a floor wage to be fixed by the Central Government; states cannot set minimum wages below this level.
Rules on timely payment of wages and prohibition of unauthorised deductions extended to all employees, irrespective of wage ceilings.
Mandatory overtime wages at least twice the normal wage rate for work beyond prescribed working hours.
2. Industrial Relations Code, 2020
Introduction of Fixed Term Employment, with FTE workers entitled to benefits equal to permanent workers.
Creation of a Re-skilling Fund, with employers contributing 15 days’ wages per retrenched worker for retraining, in addition to retrenchment compensation.
Formal recognition of trade unions through the concepts of Negotiating Union and Negotiating Council.
Model Standing Orders for the service sector allowing work-from-home arrangements by mutual agreement.
Introduction of a two-member Industrial Tribunal (judicial and administrative) for faster dispute resolution.
Permission for electronic records, registration and communication to reduce paperwork and enhance transparency.
3. Code on Social Security, 2020
Nationwide expansion of ESIC coverage, with voluntary membership for establishments employing fewer than 10 workers and mandatory coverage for hazardous industries even with a single worker.
New definitions covering aggregators, gig workers and platform workers.
Provision for a Social Security Fund to extend life, disability, health and old-age benefits to unorganised, gig and platform workers.
Uniform definition of wages (basic pay, DA and retaining allowance) to ensure higher social security benefits.
Commute-related accidents treated as employment-related for compensation purposes.
Extension of gratuity benefits to Fixed Term Employees after one year of continuous service.
4. Occupational Safety, Health and Working Conditions Code, 2020
Universal application of occupational safety, health and welfare standards in establishments with 10 or more workers, and in hazardous occupations even with a single employee.
Expanded definition of Inter-State Migrant Workers to include self-migrated workers, along with provisions for annual travel allowance and portability of benefits, including PDS.
Free annual health check-ups for employees.
Mandatory appointment letters for all employees in a prescribed format.
Broader coverage for working journalists and cine workers, including those in electronic media and audio-visual production.
Replacement of multiple boards with a single National OSH Advisory Board to set mandatory national safety and working-condition standards.
Published on December 31, 2025
