Notified Labour Codes: Embodying The Principles Of Shrameva Jayate And Atmanirbhar Bharat

Through notifications issued on 21 November 2025, the Government of India has initiated the phased implementation of the four consolidated Labour Codes, i.e., the Code on Wages, 2019 (partially notified), Industrial Relations Code, 2020 (fully notified), Code on Social Security, 2020 (partially notified), and the Occupational Safety, Health and Working Conditions Code, 2020 (fully notified). These long-awaited reforms mark a transformative shift in India's labour governance, aimed at modernising compliance, streamlining enforcement, and aligning labour regulation with evolving employment models. A major impetus for the overhaul was the fact that nearly 90% of India's unorganised workforce remained outside basic social security even after 79 years of Independence. By subsuming 29 fragmented labour laws into four comprehensive codes, the Government seeks to remove colonial-era complexities and empower both workers and enterprises, reflecting India's commitment to a resilient and self-reliant labour framework. With the decline in proportion of people below the international poverty line¹ and the expansion of India's social protection system globally, these notifications are rightly timed with the rationale to simplify the compliance, streamline the enforcement requirements and modernize the outdated laws as per the evolving economic and industrial landscape of the country.

In this backdrop, this article briefly outlines the key features of the four Labour Codes and their compliance implications for industries:

THE CODE ON WAGES, 2019: This code consolidates four major laws, i.e., the Minimum Wages Act, 1948, Payment of Wages Act, 1936, Equal Remuneration Act, 1976 and Payment of Bonus Act, 1965 into a single unified legislation, eliminating the overlapping provisions and reducing compliance complexities for the employers. Major highlights covers:

1. Provides that there shall be no discrimination on the grounds of gender in relation to wages, thereby, ensuring uniformity in the payment of wages. (Section 3)
2. A key provision of the Code is the uniform definition of "wages", which applies consistently across all labour laws. The definition ensures that the basic wage persists at least 50% of total remuneration, preventing employers from reducing statutory benefits through allowances. (Section 2(y))
3. This Code introduces a "national floor wage", to be fixed by the Central Government based on living standards. States must ensure their minimum wages are not below this threshold, ensuring uniformity across nation. (Section 9)
4. Coverage under the Code has been expanded to all employees, regardless of sector or wage threshold, thereby extending wage protection to the unorganised workforce. (Section 2(k))
5. The Code also mandates timely payment of wages, i.e., wages must be paid within the 7th of every month and continues bonus entitlements for employees earning below the notified ceilings. (Section 17)
6. Provisions for digital wage payments, web-based inspections, and graded penalties have been made aiming to strengthen enforcement and transparency while discouraging non-compliance. (Sections 15, 51 (2) and 54)
7. Employees are entitled to overtime wages at least twice the normal rate for any work done above the prescribed working hours. (Section 14)
8. Role of inspector-cum-facilitator has gained importance wherein they have been entrusted with advisory role in ensuring compliance. (Section 51(5))
9. The introduction of compounding provisions have been hailed across industries, wherein non imprisonable offences can be compounded by way of penalty, however repeat offence within five years cannot be compounded. (Section 56)
10. Certain offences have been decriminalized wherein imprisonment has been replaced with monetary fines. (Section 54 and 56)

THE CODE ON SOCIAL SECURITY, 2020: This code replaces and merges nine existing laws, including the Employees' Provident Funds, the Employees' State Insurance Act, 1948, the Maternity Benefit Act, 1961 and the Payment of Gratuity Act, 1972, amongst others, ensuring wider access to social security benefits. It expands social security protection beyond traditional formal sector employees to include gig workers, platform workers, fixed-term employees, inter-state migrant workers, and unorganised sector labourers. Major Highlights covers:

1. The Code mandates the Central Government to frame schemes for gig and platform workers, marking the first legal recognition of these emerging categories. (Sections 6(7), 45, 109 and 114)
2. The Code also provides for universal account portability through Aadhaar-linked registration. This ensures continuity of benefits even when workers change jobs, locations, or industries. (Section 142)
3. Fixed-term employees are entitled to gratuity now after one-year of continuous service as opposed to the mandatory five-year requirement as per the erstwhile legislation, thereby, improving security for short-term and contractual workers. (Section 53)
4. ESIC (Employees' State Insurance Coverage) now extends Pan-India unlike the previous legislation which had been restricted to notified regions, however coverage is mandated for hazardous occupation and plantation workers. (Section 28)
5. In terms of employer compliance, the Code introduces simplified processes, including unified registration and electronic record maintenance. (Section 111)
6. Penalties for non-compliance are graded and stricter for repeated violations, improving enforcement capacity. (Section 133)
7. Additionally, provisions allow voluntary coverage of establishments not meeting statutory thresholds. (Section 142)
8. The Code retains core benefits such as provident fund contributions, employment injury compensation, maternity benefits, insurance, and gratuity.
9. It also introduces a Social Security Fund intended to support welfare schemes for unorganised and gig workers through a combination of government support, aggregators' contributions, and corporate CSR funds. (Section 141)
10. Time bound Employees' Provident Fund inquiries, wherein five-year time limit has been set for initiating EPF inquiries and recovery proceedings. The proceedings to be completed within two years and suo motu reopening of cases has been done away with. (Section 125)
11. Ensures access to justice wherein any appeal to EPFO orders now requires 25% of the assessed amount deposit and not 40-70%. (Section 126)
12. Reduces official intervention wherein the employers can self-asses the cess liabilities in respect of Building and Other Constructions Work. (Section 103)
13. The definition of 'dependents' have been amplified and now covers grandparents and even the parent-in laws for female employees, thereby broadening family benefit access. (Section 2(24))
14. Any commuting accidents between home and workplace qualifies for compensation now. (Section 34)
15. Mandates digitization of compliances wherein electronic records, registers and returns to be maintained digitally. (Section 123(a))
16. Ensures transparency in employment opportunities wherein employers are required to report vacancies to specified career centres before recruiting. (Section 139)

THE INDUSTRIAL RELATIONS CODE, 2020: This code has amalgamated and simplified three key legislations, i.e., the Industrial Disputes Act, 1947, Trade Unions Act, 1926 and the Industrial Employment (Standing Orders) Act, 1946, with an aim to safeguard self-resilient industries and proper working conditions. Major highlights covers:

1. Introduces "Negotiating Union/Negotiating Council" framework, wherein if a single trade union in an establishment has at least 51% membership, it will be recognised as the sole negotiating union. If no union meets this threshold, a negotiating council will be formed with proportional representation. (Section 14)
2. Amendment to thresholds for layoffs, retrenchment, and closure, wherein an employer is required to pay a laid-off worker 50% of their basic wages along with dearness allowance during the layoff period. (Section 67)
3. Any non-seasonal industrial establishment employing 300 or more workers must obtain prior approval from the Central or State Government before carrying out a layoff, retrenchment, or closure; increased from the previous limit of 100. (Section 77)
4. Fixed-term employees are entitled to the same wages, benefits, and working conditions as permanent workers, including gratuity on a pro-rata basis without the five-year continuous service requirement. (Section 2(o))
5. Another major provision is the uniform strike and lockout notice requirement. Workers must provide a 14-day notice before striking in all industrial establishments, and such notice remains valid for 60 days. This harmonises earlier rules that applied only to public utility services and aims to reduce sudden work stoppages. (Section 62)
6. The Code also mandates web-based inspections, compounding of certain offences, and electronic filings, simplifying compliance. (Sections 89, 8 and 34)
7. Standing orders which were previously applicable to establishments with 100 or more workers, will now apply to those with 300 or more workers, reducing regulatory obligations for smaller units. (Section 28)
8. Furthermore, dispute resolution has been strengthened through provisions encouraging conciliation, voluntary arbitration, and streamlined Industrial Tribunal procedures. The Code also permits alternative dispute settlement mechanisms to reduce litigation delays. (Section 42, 44 and 53)
9. In addition to the retrenchment compensation, re-skilling fund has been set up to train the retrenched employees. (Section 83)
10. The definition of 'worker' has been expanded covering promotion staff, journalist and supervisory employees too. (Section 2(zr))
11. Calls for equal representation of women in gender sensitive redressal forums. (Section 4)
12. Ensures flexibility, by recognising work from home provisions in service sectors with mutual consent.
13. Ensures strict actions wherein mass strikes/mass casual leaves are resorted to. (Section 86)

THE OCCUPATIONAL SAFETY, HEALTH AND WORKING CONDITIONS (OSHWC) CODE, 2020: This code consolidates 13 earlier legislations, including the Factories Act, 1948 and the Contract Labour (Regulation and Abolition) Act, 1970 among others and replaces fragmented compliance requirements with a uniform, streamlined structure. With a larger objective of efficient and sustainable labour market, this code intends to balance the workers' rights and business friendly regulatory environment. Major Highlights covers:

1. One of the most notable new provisions is the shift towards single registration and single licensing, replacing the multiple separate approvals previously required. A unified licence now applies to factories, contract labour, and industrial premises, supported by digital record-keeping and online inspections to ensure transparency and reduce administrative burdens. (Section 3, 33 and 48)
2. This Code requires that appointment letters must be mandatorily given to the workers so appointed within 3 months of the commencement of the employment. (Section 6 (1) (f))
3. Worker protection measures have been strengthened through mandatory annual health check-ups, provision of welfare amenities such as canteens, first-aid rooms, and crèches, and the appointment of safety officers in establishments with 250 or more workers. (Section 6 (1) (c) )
4. Workplaces involving hazardous processes are subject to stricter compliance requirements, signalling a stronger regulatory approach to occupational risk. (Section 79, 80 and 84)
5. The Code expands coverage to previously unregulated or under-regulated categories.
6. For the first time, inter-state migrant workers are formally recognised, with portability of benefits through Aadhaar-linked registration, a travel allowance once a year, and entitlement to welfare schemes. (Sections 59, 60 and 61)
7. Provisions relating to employment of women have been updated significantly. Women may now be employed in all types of work, including night shifts, subject to prescribed safety and working condition safeguards, thereby, moving away from earlier restrictions. (Sections 43 and 44)
8. The Code also introduces clearer rules on working hours, leave entitlements, and overtime, to be uniformly notified by the government. (Chapter VII)
9. Accident reporting procedures are now time-bound, with graded penalties and compounding options to promote compliance while reducing litigation. (Sections 10, 87 and 107)
10. Applicability threshold for contract labour has been raised from 20 to 50 workers, wherein all India license for 5 years to be provided to the contractor. (Sections 45 and 48(3))
11. Compliance burden for small units have been reduced by increasing the thresholds for factory i.e. 20 workers (with power) and 40 workers (without power). (Section 2(w))

CONCLUSION

The comprehensive enactment of the said codes represents a significant restructuring of India's labour regulatory framework, wherein while aligning the labour laws with the embryonic economic scenarios, the legislations promises enhanced employment opportunities, simplified compliance measures, digitalization, transparency and accountability. By consolidating 29 fragmented legislations, the reforms aim to establish a more coherent and uniform legal regime governing wages, industrial relations, social security, and workplace standards. Collectively, the simplified and modernized codes promises freedom from the colonial web of legislations with a special focus on women, youth, unorganised, gig and migrant workers, thereby advancing the vision of an 'Atmanirbhar Bharat' with the principal of 'Shrameva Jayate' (labour alone triumphs) at the centre of labour governance.

As labour falls under the Concurrent List, full implementation awaits State rules, and existing laws will continue during the transition. Hence, the implementation calls for robust execution with consistency, sensitivity, and institutional oversight, to create a more equitable, transparent, and future-ready labour framework that supports both economic growth and workforce welfare. It is further advisable for the employers to categorise the areas of concerns wherein adherence to new regime is required, while also simultaneously observer the awaited state rules to ensure robust compliance and smooth shift.

Footnote

1. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2124545

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.