1

NEW LABOUR CODES – KEY CHANGES

Executive Summary
India has undertaken a comprehensive reform of its labour laws through the enactment
of four major codes between 2019 and 2020. These codes consolidate and modernize
existing legislation across four critical domains: Wages, Industrial Relations, Social
Security, and Occupational Safety, Health & Working Conditions. This document
provides a detailed analysis of the key changes, their implications, and the transformative
impact on employers, workers, and the broader labour ecosystem.

Remark:

These Labour Codes mark a major overhaul of India’s regulatory framework,

replacing numerous fragmented laws with a unified, modern system. They are
designed to simplify compliance, enhance worker protection, and create a more

Introduction
The Government of India has introduced sweeping reforms to labour legislation through
the following codes:

• Code on Wages (2019)

• Industrial Relations Code (2020)
• Social Security Code (2020)
• Occupational Safety, Health & Working Conditions Code (2020)
These four codes replace and consolidate multiple existing laws, streamlining compliance
and providing comprehensive coverage across the organized and unorganized sectors.

Remark:

India’s four new Labour Codes (2019–2020) consolidate 29 existing laws into a
streamlined framework covering wages, industrial relations, social security, and
occupational safety. The reforms modernize compliance, expand worker
protections, and create a unified regulatory structure for both organized and
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Part 1: Code on Wages (2019)

Overview
The Code on Wages, 2019 consolidates three existing pieces of legislation into a single,
comprehensive framework:

Category Existing Legislation New Legislation

Category I Minimum Wage Act
Payment of Wages Act Code on Wages 2019
Payment of Bonus Act

Key Changes

Applicability
Minimum Wage Act:

• Existing: Applicable only to scheduled employments

• Code on Wages: Applicable to all employees, including organized and unorganized
sector workers
Payment of Wages Act:

• Existing: Applied only to employees drawing less than ₹24,000

• Code on Wages: All employees are protected without any wage limit, including
supervisors and managers
Payment of Bonus Act:

• Existing: Applicable to establishments with 20 or more employees

• Code on Wages: Applicable to establishments employing 20 or more persons with
few exemptions

Remark:

The Code on Wages, 2019 merges the Minimum Wage, Payment of Wages, and
Payment of Bonus Acts into one unified law, expanding coverage to all employees
across sectors. It removes wage limits, ensures universal applicability for wage
protection, and standardizes bonus provisions for establishments with 20 or more
employees.
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Definitions and Coverage

Contract Labour Definition:
The new code excludes regular employees of contractors who are getting annual
increments and social benefits, providing clearer definitional boundaries.

Expanded Worker Definition:

The code now defines employees to cover all categories, including supervisory and
managerial staff, removing previous wage-based restrictions.

Remarks:

The Code refines the definition of contract labour by excluding regular

in classification. It also broadens the definition of “employee” to include all

limitations.

Equal Remuneration:

• Existing: Restricted to gender discrimination only

• Code on Wages: Expanded to cover all employees, ensuring equal pay for same or
similar work across all categories

Remark:

The Code expands equal remuneration protections from solely gender-based

discrimination to covering all employees, ensuring equal pay for the same or
similar work across every category of worker.
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National Minimum Wage Framework

A significant innovation is the introduction of a National Minimum Wage established
by the central government. Key provisions include:

• Central government declares the national minimum wage universally or with

regional variations
• State governments cannot fix their minimum wages below the national minimum
wage
• Minimum wages revised after every five years
• Previously: No provision for central government intervention in minimum wage
setting

Remark:

The Code introduces a National Minimum Wage set by the central government,
preventing states from setting lower wage levels and ensuring periodic revision
every five years—marking the first central oversight in minimum wage
determination.

Enhanced Worker Protections

Final Payment Time Limit:

• Existing: Two days limit to pay full and final settlement in case of dismissal or
retrenchment (not applicable to resignations)
• Code on Wages: Extended to include resignations
Claims Time Limit:

• Existing: Six months (Minimum Wage Act), one year (Payment of Wages and
Bonus Acts)
• Code on Wages: Extended to three years across all wage-related claims

Remark:

The Code strengthens worker protections by requiring timely full-and-final

payments even for resignations and by extending the limitation period for all
wage-related claims to three years, offering employees a significantly longer
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Inspection and Compliance Regime

Modernized Inspection Process:

• Physical inspections by inspectors renamed as facilitators

• Territory expanded for compliance oversight
• Web-based electronic inspections introduced to provide better compliance
information to employers
Enhanced Penal Provisions:

• Existing: Fines from ₹500 to ₹20,000 with imprisonment up to one year

• Code on Wages: Increased penalties from ₹50,000 to ₹1 lakh with imprisonment
up to three months for repeat offences.

Remark:

The Code modernizes inspections by converting inspectors into compliance

facilitators, expanding their jurisdiction, and introducing web-based electronic
checks. It also significantly increases penalties, with fines up to ₹1 lakh and stricter

Impact Assessment
On Employers:

• Broader applicability means more establishments must comply with wage

regulations
• Digital inspection system provides better tracking and compliance opportunities
• Increased penalties incentivize timely compliance

On Workers:

• Enhanced protection covers all wage categories

• Three-year claim period provides longer recourse for wage disputes
• National minimum wage ensures baseline protection across regions.
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Remark:

The reforms increase employers’ compliance responsibilities while improving

transparency through digital inspections and stricter penalties. For workers, the
Code ensures wider coverage, stronger wage protections, a longer window for

Part 2: Industrial Relations Code (2020)

Overview
The Industrial Relations Code, 2020 consolidates three existing laws into a single
framework:

Category Existing Legislation New Legislation

Category Industrial Employment Standing Order
II Act, 1946
Industrial Relations Code
Industrial Disputes Act, 1947 2020
Trade Unions Act, 1926

Remark:

The Industrial Relations Code, 2020 merges the laws on trade unions, industrial

Major Definitions and Categories

Worker Classification
The definition of worker is now based on wages drawn, with workers earning up to
₹18,000 per month classified as workers entitled to all protections.

Fixed Term Employment (FTE)

A transformative new concept introduced in the code:
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• Concept: Employers can hire Fixed Term Employees for specific durations
without triggering retrenchment compensation
• Benefit Parity: FTE workers receive the same salary, statutory benefits, ESI,
EPF, bonus, and social security as regular employees
• Service Recognition: Completion of tenure is NOT considered retrenchment
• Gratuity Eligibility: FTE workers become eligible for gratuity after one year of
service (compared to five years for permanent employees)

Remark:

The Code classifies workers based on a wage threshold of ₹18,000, bringing more
employees under protective provisions. It introduces Fixed Term Employment,
allowing time-bound hiring with full parity in wages and benefits, gratuity
eligibility after one year, and without treating end-of-contract as retrenchment.

Industrial Dispute Timeline

• Existing: Workers could raise disputes within three years
• Code: Reduced to two years, providing faster dispute resolution windows

Strike and Lockout Notice Requirements

• 14-Day Prior Notice: Required before any strike or lockout in all industrial
establishments (previously applied only to public utility services)
• Impact: Reduces spontaneous industrial action, provides time for negotiation

Remark:

The Code shortens the window to raise industrial disputes from three years to
two, promoting quicker resolution. It also mandates a 14-day notice for all strikes
and lockouts, ensuring better predictability and room for negotiation across all
establishments.
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Expanded Lay-off, Retrenchment, and Closure Thresholds

Parameter Existing Industrial Relations Code

Threshold for 100 workers 300 workers
Government
Approval
Impact More establishments More establishments can take
require government such actions independently
permission

Remark:

The Code raises the threshold for requiring government approval for layoffs,
retrenchment, and closure from 100 to 300 workers, allowing more establishments

Grievance Redressal Committee

• Existing: Maximum 6 members
• Code: Increased to 10 members in establishments with 20+ workers
• Benefit: More comprehensive representation and faster issue resolution

Remark:

The Code expands the Grievance Redressal Committee to up to 10 members for

establishments with 20 or more workers, enabling broader representation and

Recognition of Negotiating Unions

A new and significant feature:

• Single Union: If only one trade union exists, it is automatically recognized as the
sole negotiating union
• Multiple Unions: If multiple unions exist, the union with at least 51% of workers
on the muster roll is recognized as the sole negotiating union
• Purpose: Streamlines collective bargaining and reduces fragmentation
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Remark:

The Code introduces a clear system for recognizing negotiating unions: a single
union is automatically designated, while in multi-union setups, the one with 51%

Reskilling Fund
The appropriate government shall establish a reskilling fund comprising:

• Contribution from employer equal to 15 days' wages (last drawn by retrenched

worker)
• Amount credited to worker's account within 45 days of retrenchment
• Purpose: Support worker transition and skill development

Modified "Appropriate Government" Definition

• Now includes contractor establishments
• Contractor's appropriate government is determined by the location where
contract labour is deployed

Expanded Definition of "Industry"

The term now includes "any systematic activity carried on by cooperation between
employer and workers," with specific exclusions:

• Institutions engaged in charitable, social, or philanthropic services

• Sovereign functions
• Domestic services
Remark:

The Code introduces a Reskilling Fund to support retrenched workers with 15

days’ wages paid within 45 days, clarifies that the “appropriate government” for
contractors depends on the place of deployment, and broadens the definition of
“industry” to include most organized activities while excluding charitable
institutions, sovereign functions, and domestic work.
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Wages Definition (Industrial Relations Context)

The code provides a three-part definition:

1. Inclusion: All salary components expressed in monetary terms (basic salary,

reimbursements, allowances, benefits)
2. Exclusion: Bonus, conveyance allowance, HRA, overtime allowance,
accommodation, medical attendance, commissions, EPF/pension contributions,
special expenses, gratuity, retrenchment compensation, award/settlement
payments
3. Limit: Total excluded components cannot exceed 50% of total remuneration

Remark:

The Code defines wages to include all monetary salary components while
excluding items like bonus, HRA, overtime, commissions, and statutory
contributions. However, these exclusions cannot exceed 50% of total
remuneration, ensuring that at least half of an employee’s pay is counted as

Worker Protections and Rights

Suspension Allowance
During suspension pending investigation:

• First 90 days: 50% of wages

• Remaining period: 75% of wages

Industrial Tribunal Access

Workers may approach the Industrial Tribunal for adjudication within 45 days after
applying for conciliation, specifically for disputes related to:

• Dismissal
• Retrenchment
• Termination

Government Approval Requirement with Enhanced Penalties

Establishments with 300+ workers requiring lay-off, retrenchment, or closure must
obtain prior government approval:
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• Fine for violation: ₹1,00,000 (extendable up to ₹10,00,000)

• Applies to: Mines, factories, plantations

Remark:

The Code strengthens worker rights by ensuring suspension allowances of 50%

wages for the first 90 days and 75% thereafter during investigations. It allows
workers to directly approach the Industrial Tribunal within 45 days for disputes
involving dismissal, retrenchment, or termination. For establishments with 300+
workers, prior government approval is mandatory for lay-off, retrenchment, or
closure, with violations attracting penalties from ₹1,00,000 up to ₹10,00,000,

Impact Assessment
On Employers:

• Higher thresholds for government approval reduce bureaucratic constraints

• FTE flexibility enables workforce optimization without retrenchment
compensation
• Streamlined grievance mechanisms reduce dispute resolution time
On Workers:

• FTE parity ensures equal benefits regardless of contract type

• Expanded dispute mechanisms provide more avenues for grievance resolution
• Strike notice requirements enhance bargaining position through negotiation time
• Reskilling fund supports career transitions

Remark:

The Code provides employers greater operational flexibility through higher

approval thresholds, FTE hiring options, and faster grievance resolution. For
workers, it ensures equal benefits for FTEs, broader dispute redressal avenues,
structured strike procedures that support negotiation, and a reskilling fund to aid
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Part 3: Social Security Code (2020)

Overview
The Social Security Code, 2020 is groundbreaking in extending social security to
previously excluded worker categories, particularly gig and platform workers.

New Worker Categories

Gig Workers
Definition: Person who performs work or participates in a work arrangement outside
the traditional employer-employee relationship.

Characteristics:

• Independent arrangements
• Freelancers
• Project-based workers
• Short-term workers

Platform Workers
Definition: Person engaged in platform work.

Platform Work: Employment in which organizations or individuals use online platforms

to access services or solve specific problems in exchange for payment (e.g., food delivery,
ride-sharing, freelance services).

Significance: India is among the first countries to formally recognize and legislate
platform-based work arrangements, acknowledging the digital gig economy.

Remark:

The Social Security Code, 2020 marks a major reform by formally bringing gig
workers and platform workers into India’s social security framework for the first
time. It defines gig workers as individuals engaged in flexible, non-traditional
work arrangements such as freelancing, project-based tasks, and short-term
assignments. Platform workers are those who provide services through digital
platforms—such as ride-sharing, food delivery, and online freelancing
marketplaces. By legally recognizing these categories, India becomes one of the
first nations to acknowledge and regulate the growing digital gig economy,
ensuring that millions of workers outside conventional employment structures
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Expanded Social Security Coverage

Employees State Insurance Scheme (ESIC)

Key Expansions:

• Voluntary registration allowed if employer and majority employees agree

• ESIC scheme now available in all 740 districts
• Extended to: Gig workers, platform workers, unorganized sectors, and
plantation workers
• Hazardous Occupation Extension: Government can extend ESI to any
hazardous occupation even with a single employee
Remark:

The Code significantly broadens ESIC coverage by allowing voluntary

registration, extending the scheme to all 740 districts, and including gig,
platform, unorganized, and plantation workers. It also empowers the government
to apply ESIC to any hazardous occupation, even if only one worker is employed.

Employer Default Protection:

If employer fails to pay ESI contributions, ESIC must pass benefits to employees,
recovering costs from employer including:

• Capitalized benefit value

• Accrued interest
• Damages

Remark:

If an employer fails to deposit ESI contributions, ESIC will still provide benefits
to employees and later recover the full cost from the employer, including the
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Gratuity Provisions
Permanent Employees:

• Eligible after five years of continuous service (unchanged)

Fixed-Term Employees:

• Eligible after one year of service

• Significant reduction from the five-year standard
Working Journalists:

• Gratuity eligibility period reduced from five years to three years

Remark:

The Code retains the five-year service requirement for permanent employees but

eligible for gratuity after just one year of service, ensuring they receive benefits
comparable to permanent staff despite shorter contracts. For working journalists,
the eligibility period is reduced from five years to three, acknowledging the
demanding nature of their profession. Overall, the Code broadens gratuity access

Maternity Benefit
Medical Bonus Enhancement:

• Existing: Up to ₹3,500 for pre-natal, confinement, and post-natal care (if not
provided by employer)
• Code: Upper limit increased from ₹3,500 to ₹20,000 (further amendable by central
government)

Remark:

The Code significantly enhances maternity support by raising the medical bonus
limit from ₹3,500 to ₹20,000 for women who do not receive pre-natal,

modifiable further by the central government—ensures stronger financial

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Platform and Gig Worker Social Security

Aggregator Contributions:

• Contribution rate: 1–2% of annual turnover (notified by government)

• Maximum cap: 5% of amount paid or payable to gig/platform workers
Remark:

Aggregators must contribute 1–2% of their annual turnover toward social

security for gig and platform workers, subject to a cap of 5% of the total payments
made to these workers, ensuring a dedicated funding mechanism without

Registration Requirements:
Mandatory registration for all three worker categories:

• Gig workers
• Platform workers
• Unorganized workers

Remark:

The Code mandates compulsory registration for gig, platform, and unorganized
workers, ensuring they are formally recognized and eligible to access various

Employment Information and Monitoring

Career Centers:

• Employers, job seekers, and self-employed individuals must register

• Establishments required to notify vacancies electronically or otherwise
• Career centers maintain employment records and provide vocational guidance
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Remark:

The Code strengthens employment monitoring by requiring employers, job

seekers, and self-employed individuals to register with career centers.

Social Security Boards for Unorganized Workers

Key Features:

• Creation of dedicated social security boards

• Coverage of gig, platform, and unorganized workers
• Expanded funding sources including corporate social responsibility (CSR)
contributions
• Special purpose vehicles (SPVs) for scheme implementation

Remark:

for unorganized, gig, and platform workers. These boards are supported through
diverse funding sources—including CSR contributions—and may use SPVs to

Impact Assessment
On Workers:

• Revolutionary inclusion of gig and platform workers in formal social security

• Enhanced maternity benefits for all women workers
• Reduced gratuity eligibility periods, particularly for journalists
• Access to career guidance and employment information
On Employers/Aggregators:

• New compliance obligation for aggregators

• Contribution requirements to worker welfare funds
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• Enhanced registration and monitoring requirements

Remark:

The Code greatly strengthens worker welfare by formally covering gig/platform

access to employment services. For employers and aggregators, it introduces new

compliance duties, including mandatory contributions to welfare funds and

Part 4: Occupational Safety, Health & Working Conditions Code (2020)

Overview
This code consolidates 13 existing pieces of legislation related to workplace safety and
working conditions:

Factories Act, 1948

Mines Act, 1951

Sales Promotion Employees Act, 1976

Beedi and Cigar Workers Act, 1966
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Remark:

The Occupational Safety, Health & Working Conditions Code consolidates 13

major labour laws—including those governing factories, mines, contract labour,
migrant workers, plantations, construction workers, transport workers,
journalists, and entertainment industry employees—into a single unified
framework to streamline workplace safety, health, and working condition
regulations.

Modernization and Simplification

Single Registration System

• Previous: Multiple registrations for different laws and regulations
• New: Single centralized registration across all occupational safety regulations
• Benefit: Ease of doing business, centralized database, reduced compliance burden

Remark:

The Code replaces multiple registrations across various labour laws with a single
unified registration system, creating a centralized database that simplifies
compliance and significantly reduces the administrative burden on employers.

Statutory Appointment Letter

Appointment letters are now made statutory, ensuring:

• Clarity of employment terms

• Documentation of employment relationship
• Worker awareness of rights and obligations
Remark:

The Code makes issuing appointment letters mandatory, ensuring clear

documentation of employment terms and strengthening transparency so workers
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Women Workers and Night Shifts

Historic Change:

• Female workers can now work night shifts with their consent
• Night shift timing: 7:00 PM to 6:00 AM (subject to government approval)
• Impact: Expands employment opportunities for women, removes restrictive
gender-based limitations

Remarks:

Women can now legally work night shifts (7 PM to 6 AM) with their consent and
subject to government-approved safeguards, expanding employment

Rights and Duties Framework

Employee Responsibilities:

• Take care of personal health and safety

• Comply with specified safety and health measures
• Report unsafe situations to inspectors
Employer Obligations:

• Provide safe working conditions

• Implement health and safety measures
• Establish welfare facilities
• Ensure compliance with statutory requirements
Remark:

for providing safe working conditions, health and welfare facilities, and full
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Expanded Definitions and Coverage

Factory Definition (Revised)

Previous threshold: Varied based on specific conditions

New threshold:

• With power: 20 or more employees

• Without power: 40 or more employees
• Exclusions: Hotels, restaurants, eating places, Electronic Data Processing Units,
Computer Units

Remark:

The Code revises the definition of a factory by setting uniform thresholds—20 or

more workers with power and 40 or more without power—while excluding units
like hotels, restaurants, and IT/EDP facilities, thereby streamlining coverage and

Hazardous Substance Definition

Any substance with potential to cause:

• Physical hazards
• Health hazards
• Environmental impacts
• To humans, living creatures, or ecosystems

Remark:

A hazardous substance is defined as any material that can cause physical, health,
or environmental harm, posing risks to humans, living beings, or ecosystems.
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Industrial Premises Definition

Premises where any industry, trade, or business is conducted:

• With or without power

• Includes godowns
• Broader coverage than traditional factory definitions
Remark:

An industrial premises includes any location where industry, trade, or business is

and more inclusive coverage than the traditional factory definition.

Contract Labour Definition (Modified)

• Now includes inter-state migrant workers
• Excludes: Part-time employees with regularly accepted employment conditions
entitled to social security benefits
• Clearer boundaries between contract and regular employment

Core Activity Definition

Distinguishes:

• Core Activity: Activities for which the establishment is set up

• Non-Core Activities: Housekeeping, security, canteen (not triggering
compliance requirements for principal employer directly)
Implication: Principal employer liability is tied to core activities, clarifying
responsibility boundaries.

Remark:

The Code refines contract labour rules by including inter-state migrant workers
while excluding part-time staff who receive regular benefits, creating clearer

making the principal employer primarily responsible for core functions and
reducing direct liability for outsourced non-core activities like housekeeping,
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Audio-Visual Production Definition (New)

Covers:

• Feature films
• Non-feature films
• Television serials
• Web-based serials
• Talk shows
• Reality shows
Covered workers: Singers, news readers, dancers, stunt persons, technical artists,
supervisory staff (subject to wage ceiling to be notified)

Inter-State Migrant Worker (Modified)

New ceiling: ₹18,000 per month wage limit

• Provides clarity on coverage boundaries

• Ensures protection of migrant workers

Metro Railways (Added)

Metro railway systems now treated as railways, ensuring consistent safety standards.

Newspaper Establishment (Drastically Changed)

Now covers:

• Individual proprietorships
• Partnerships
• Private firms
• Body corporates
• Subsidiaries of common holding companies
• All organizational forms in newspaper business
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Remark:

The Code introduces a wide expansion of coverage across multiple industries and
worker categories. It newly defines audio-visual production to include feature and
non-feature films, TV serials, web series, talk shows, reality shows, and related
creative/technical roles such as singers, dancers, stunt artists, news readers,
technical crews, and certain supervisory staff (subject to a wage ceiling yet to be
notified).

The definition of inter-state migrant workers is refined with a new wage ceiling
of ₹18,000 per month, ensuring clearer applicability and wider protection for
migrant labour.

Metro railway systems are now formally included under the definition of railways,
ensuring uniform safety and operational standards similar to traditional railways.

The Code also significantly modernizes the definition of newspaper

establishments, expanding it to include proprietorships, partnerships, private
firms, corporations, subsidiaries, and all forms of business structures involved in
printing, publishing, or managing newspapers—thereby bringing the entire
media ecosystem under consistent labour and safety regulation.

Principal Employer Liability

Welfare Facilities
Principal employer must provide welfare facilities where contract labour is deployed:

• Living accommodations (where applicable)

• Medical facilities
• Sanitation facilities
• Rest areas

Wage Payment Responsibility

Principal employer is liable to:

• Make payment of wages to contract labour deployed

• Ensure timely and complete payment
• Comply with wage codes and regulations
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Manager Exclusion (Modified)

Managers have been excluded from the principal employer definition, clarifying the
chain of responsibility.

Working Hours and Overtime

General Working Hours

• Maximum work days: 6 days per week
• Exception: Motor transport workers
• Prescribed by: Central or state government rules

Overtime Compensation
• Payment: Double the rate of daily wages
• Ensures worker compensation for extended hours

Leave Provisions
Employees entitled to leave as prescribed by government rules and regulations.

Remarks:

The Code strengthens principal employer liability, requiring them to ensure

care, sanitation, and rest areas—for all contract labour deployed at their

in compliance with wage regulations. Managers are explicitly excluded from the
definition of “principal employer,” bringing clarity to accountability and

The Code standardizes working hour regulations, limiting work to a maximum

of six days a week (with specific exceptions like motor transport workers), with
the actual rules framed by central or state governments. Overtime work must be
compensated at twice the normal wage rate, ensuring fair payment for extended
hours. Additionally, the Code preserves employee entitlements to paid leave,
which will follow government-prescribed rules, ensuring uniformity and legal
 25

Offences and Penalties

Serious Offences (Death-Related)

Offence leading to employee death:

• Imprisonment: Up to two years

• Fine: Up to ₹5,00,000
• Compensation: Court may direct at least 50% of fine be paid as compensation to
heirs of victim
Court Authority:

• Chief Inspector-cum-Facilitator
• Inspector-cum-Facilitator
• Officer of appropriate government
• Authorized persons under the code

General Violations
Where no specific penalty is prescribed:

• Fine: ₹2,00,000 to ₹3,00,000

Employee Violations:

• Fine: Up to ₹10,000

Remark:

Offences & Penalties

• Death-related offences: Up to 2 years’ imprisonment and ₹5,00,000 fine;

minimum 50% of the fine may be directed as compensation to the worker’s
family.
• Authorities: Chief Inspector-cum-Facilitator, Inspector-cum-Facilitator,
government officers, and authorised persons can initiate action.
• General violations: Fine between ₹2,00,000–₹3,00,000.
• Employee violations: Fine up to ₹10,000.
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Inspector-cum-Facilitator (Renamed Role)

Previous: Inspector (enforcement-oriented)
New: Inspector-cum-Facilitator

Functions:

• Supply information to employers and workers

• Provide advice on compliance
• Support effective means of meeting code provisions
• Balance enforcement with cooperative compliance

Remark:

The traditional enforcement-heavy Inspector role has been redefined as an

Inspector-cum-Facilitator, shifting toward a more collaborative compliance
approach. The new role focuses on:
• Guidance: Providing information and clarifications to employers and
workers.
• Advisory support: Helping establishments understand and meet
compliance requirements.
• Facilitation: Promoting practical methods to comply with the Code.
• Balanced oversight: Combining enforcement powers with a cooperative,
supportive approach.

Impact Assessment
On Employers:

• Simplified single registration system reduces compliance complexity

• Inspector-facilitator approach encourages cooperative compliance
• Enhanced penalties incentivize strict adherence
• Clearer definitions reduce interpretative ambiguity
On Workers:

• Expanded definitions increase protective coverage

• Enhanced penalties protect against violations
 • Worker responsibilities clarified
• Women workers gain expanded employment opportunities
Remark:

The new labour framework simplifies compliance for employers through single
registration and a guidance-based inspection system. Clearer definitions and
higher penalties ensure stricter adherence. Workers benefit from expanded
coverage, stronger protections, and improved opportunities, including enhanced
roles for women.

Cross-Cutting Analysis: Common Themes

Theme 1: Expanded Definitional Scope

Across all four codes, there is a consistent expansion of:

• Worker categories: Including supervisory, managerial, gig, platform workers

• Sectoral coverage: From traditional organized sector to unorganized, gig, and
platform-based work
• Wage protections: Removing arbitrary wage limits and extending coverage
universally

Theme 2: Simplified Compliance Architecture

All codes feature:

• Consolidation of multiple laws into single frameworks

• Single registration systems where applicable
• Digital and electronic compliance mechanisms
• Facilitator-oriented (rather than enforcement-only) inspection regimes

Theme 3: Enhanced Worker Protections

Universal improvements across codes:

• Extended claim periods and eligibility windows

• Increased statutory protections
• Enhanced compensation for violations
• Explicit recognition of new worker categories

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Theme 4: Balanced Employer Flexibility
While protecting workers, codes introduce:

• Fixed-term employment without retrenchment compensation

• Higher thresholds for government approval (lay-offs, retrenchment)
• Single registration systems reducing procedural complexity
• Facilitator approach to compliance support

Theme 5: Digital Transformation

All codes incorporate:

• Web-based inspections
• Electronic registration systems
• Online compliance monitoring
• Career center databases for employment information

Remark:

1. Expanded Definitional Scope

The codes significantly broaden the universe of who is protected and regulated.
Definitions now include gig workers, platform workers, supervisory and
managerial staff, and migrant workers. Sectoral coverage extends beyond
traditional factories into service sectors, digital workspaces, and media
industries. Wage protections have been universalized, removing outdated wage
ceilings and ensuring broader applicability.

2. Simplified Compliance Architecture

Multiple legacy laws have been consolidated into four streamlined codes,
supported by single registration systems and digital filings. Compliance is
increasingly electronic, reducing paperwork and procedural friction. The shift
from an “Inspector” to an “Inspector-cum-Facilitator” marks a move toward
cooperative compliance rather than purely punitive enforcement.

3. Enhanced Worker Protections

Workers benefit from strengthened safeguards such as extended time limits for
claims, higher compensation for violations, broader coverage for social security,
and explicit inclusion of new labour categories. Penalties for non-compliance are
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 stricter and more uniform, creating a more accountable ecosystem for worker
welfare.

While protections are enhanced, employers also gain flexibility. Fixed-term

employment is formalized, thresholds for government approval on retrenchment

The Codes embed digital-first processes through online inspections, web-based

registration, electronic wage and compliance systems, and centralized
employment databases. This improves transparency, reduces human interface

Implications and Recommendations

For Policy Implementation

1. Phased Implementation: Stagger implementation across sectors to allow
organizational adaptation

2. Capacity Building: Train inspectors-cum-facilitators on new provisions and

supportive compliance approaches

3. Technology Infrastructure: Invest in robust digital systems for registration,

monitoring, and compliance reporting

4. Stakeholder Engagement: Include worker unions, employer associations, and

civil society in implementation oversight

For Employers
1. Audit Compliance Readiness: Review existing practices against all four codes

2. System Upgradation: Implement digital payroll, records, and registration

systems

3. Policy Documentation: Update employment letters, codes of conduct, grievance

procedures
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4. Training Programs: Educate managers and HR teams on new provisions

For Workers and Unions

1. Awareness Campaigns: Educate workers on expanded protections and rights

2. Capacity Building: Train union representatives on new dispute mechanisms

3. Digital Literacy: Build skills for accessing online career centers and registration
systems

4. Advocacy: Monitor implementation and flag non-compliance to authorities

For Government
1. Monitoring Framework: Establish systems to track implementation progress

2. Dispute Resolution: Strengthen infrastructure for resolving industrial disputes

3. Regular Review: Periodic assessment of code effectiveness and worker/employer

feedback

4. Amendment Readiness: Prepare for amendments to address implementation

challenges and evolving labour market realities

Remark:

workers, unions, and the government to ensure effective implementation and

smooth transition. A multi-stakeholder approach is crucial for realizing the
intended simplification, digital transformation, and enhanced worker
protections.

Effective rollout depends on a phased, sector-wise implementation strategy that

allows industries to adapt gradually. Training inspectors-cum-facilitators is
essential to shift from punitive enforcement to guidance-oriented compliance.
The government must strengthen digital infrastructure to support online
registration, monitoring, and inspections. Continuous engagement with worker
unions, employer bodies, and civil society will ensure smooth and transparent
implementation.

Employers must undertake a comprehensive compliance audit to identify gaps

between current practices and the requirements of all four codes. Adoption of
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digital systems—especially for payroll, attendance, and statutory records—is

critical. Organizational policies, including employment contracts, HR manuals,
and grievance procedures, must be updated. Managers, HR teams, and supervisors
require structured training to understand new definitions, thresholds,
obligations, and penalties.

3. Worker & Union Implications

Workers and trade unions need awareness campaigns to understand expanded

rights, protections, and entitlements. Union leaders must be trained on the
revised dispute-resolution processes, including conciliation, arbitration, and
digital redressal systems. Digital literacy is essential for workers to access online
portals, career centres, and registration platforms. Unions also play a key role in
monitoring compliance and reporting violations.

4. Government-Level Implications

The government must design strong monitoring frameworks to track

implementation progress across states and sectors. Dispute-resolution
mechanisms must be strengthened to handle increased digitization and changing
industrial relations. Regular reviews and impact assessments are vital for
understanding ground realities and addressing gaps. Governments should also
remain prepared to amend provisions as labour markets evolve and new
challenges emerge.

Conclusion
The four labour codes represent India's most comprehensive labour law reform in
decades. By consolidating 29 existing laws into four streamlined codes, the government
has modernized labour regulation while expanding protections for vulnerable worker
categories, particularly gig and platform workers.

Key Achievements:

• Universal Coverage: Extended protections to organized, unorganized, gig, and

platform sectors
• Simplified Compliance: Reduced bureaucratic complexity through single
registration and digital systems
• Worker-Centric Reforms: Enhanced benefits, faster dispute resolution, and
expanded social security

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• Balanced Framework: Provided employer flexibility while maintaining worker

protections
• Inclusive Growth: Recognized emerging labour market realities in the digital
economy
Forward-Looking Considerations:

The codes' success depends on:

• Effective implementation across diverse state administrations

• Adequate resource allocation for inspection and dispute resolution
• Continuous monitoring and stakeholder feedback
• Readiness to amend provisions as labour market dynamics evolve
• Integration with India's broader development and social security agenda
The labour codes codify India's commitment to formal recognition of all workers while
maintaining business competitiveness—a delicate balance that will define India's labour
landscape for decades to come.

Remark:

India’s four labour codes mark the most significant reform in decades, unifying
29 laws into a modern, streamlined framework. The codes expand protections to
all worker categories—including gig and platform workers—while simplifying

Going forward, the effectiveness of these reforms will depend on robust

implementation across states, adequate administrative capacity, continuous
monitoring, and readiness to adapt to changing economic conditions. Overall, the
labour codes reinforce India’s commitment to inclusive growth by formally

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