Minimum pay, 8-hour workday: Govt rolls out four labour codes

The Centre on Friday enforced four labour codes replacing 29 labour laws in a landmark reform that expands workers’ rights and social security while simplifying rules to boost the currently weak manufacturing sector.

The Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020 and the Occupational Safety, Health and Working Conditions Code, 2020 came into force from Friday, setting India on the path to creating a future-ready workforce.

Major overhaul of workplace laws

Working hours capped at 8-hour/day or 48-hour/week

Consent-based overtime, paid at twice the regular wage rate

Timely wage payment made mandatory

Bonus eligibility on completing 30 days of work in a year

Mandatory appointment letters for all workers

Social security for all, including gig and platform workers

Statutory minimum wages under the Code on Wages

Free annual health check-ups for workers above 40

Women allowed night shifts with consent, safety safeguards

Single registration, single licence to ease compliance

Equal pay for equal work mandated

Mandatory appointment letters for workers across sectors, guaranteed minimum wage, social security for all, including gig and platform workers, compulsory wage payments and opening up of night shifts for women in all industries are the hallmarks of the new codes.

The most significant reform relates to work hours amid the ongoing debate over the length of a normal workweek. Infosys founder NR Narayana Murthy recently advocated a 70-hour workweek to boost development, but the codes cap normal working hours at 8 hours a day and 48 hours a week, and mandate overtime only with worker consent and payment at twice the regular rate.

As labour is a concurrent subject, 20 states had earlier rolled out the codes after Parliament passed these in 2020. The government dithered in implementation amid stiff opposition from labour unions and the Opposition. The codes require employers to ensure annual health check-ups for workers above 40 years of age.

“Social protection coverage will be expanded to all workers. ESIC coverage was limited to specific industries. Establishments with fewer than 10 employees were generally excluded and hazardous-process units did not have uniform and mandatory ESIC coverage,” an official said.

Prime Minister Narendra Modi hailed the reforms. “Shramev Jayate! Today, our government has given effect to the four labour codes. This is one of the most comprehensive and progressive labour-oriented reforms since Independence. It greatly empowers our workers. It also significantly simplifies compliance and promotes ease of doing business,” he said.

Labour Minister Mansukh Mandaviya said the codes would guarantee dignity for every worker. He said the codes would ensure timely minimum wages for all workers, appointment letters, equal pay for equal work, social security for 40 crore workers and gratuity for fixed-term employees after one year of employment.

Double wages for overtime, 100 per cent health security for workers in hazardous sectors and social justice for workers as per international standards are other highlights of the codes, which Unicef has welcomed.

Officials said the codes would boost the manufacturing sector which had constrained by archaic laws. Manufacturing contributes less than one fifth to India's $4 trillion economy and needs expansion for India to grow faster.

A key reform is the first-ever legal definition of gig and platform workers, recognising their contribution by extending social protection to them. India has 12 million gig workers as of 2024–25, with NITI Aayog projecting the number to rise to 23.5 million by 2029-30.

The new codes also raise from 100 to 300 the threshold for units requiring prior approval for layoffs. Other proposals include a national floor wage, gender-neutral work policies, an inspector-cum-facilitator model for supportive compliance, faster dispute resolution through two-member tribunals and a National Occupational Safety and Health Board to harmonise safety standards.

With the codes now in effect, the government will begin consultations before framing the detailed rules.