Understanding the New Labour Codes: What Employers and Employees Must Know

India consolidated 29 central labour laws into four comprehensive Labour Codes from 2020, representing the biggest labour law reform in independent India.

The Four Labour Codes

• Code on Wages, 2019: Regulates minimum wages, overtime, and bonus payments

• Industrial Relations Code, 2020: Governs trade unions, strikes, and retrenchment

• Social Security Code, 2020: Covers ESI, EPF, gratuity, and gig worker welfare

• Occupational Safety, Health and Working Conditions Code, 2020: Workplace safety standards

Key Changes for Employers

• Universal minimum wage across all sectors

• Simplified compliance with single registration and returns

• Fixed-term employment contracts allowed

• Increased threshold for standing orders (300 employees)

• Digital inspection and compliance systems

Key Protections for Employees

• Right to minimum wage (not less than ₹176/day nationally)

• Overtime at twice the ordinary rate

• Written appointment letters mandated

• Annual health check-ups for hazardous industries

• Social security coverage for gig and platform workers

Important Definitions

• Worker: Includes supervisory staff (earlier excluded)

• Fixed-term employee: Entitled to all statutory benefits

• Platform worker: Now covered under social security

• Aggregator: Digital platforms must contribute to social security

Current Status
Most states have published draft rules. Implementation varies by state. Employers should:

• Update employment contracts

• Review wage structures for compliance

• Register under the new digital portals

• Train HR teams on new requirements

The Labour Codes aim to balance ease of doing business with worker protection. Both employers and employees should familiarise themselves with these fundamental changes.