Frequently Asked Questions

India's labour laws had grown complex over decades, with 29 central laws and over 100 state laws creating overlapping and sometimes contradictory requirements. The Second National Commission on Labour (2002) recommended consolidation to simplify compliance, reduce litigation, and create a more business-friendly environment while protecting worker interests. The four new codes aim to modernize the legal framework, extend protections to the unorganized sector and gig economy, and promote ease of doing business.

The Second National Commission on Labour was constituted in 1999 under the chairmanship of Ravindra Varma to study and make recommendations on all aspects of labour policy. Its 2002 report recommended consolidating the numerous labour laws into 4-5 groups covering industrial relations, wages, social security, safety and welfare, and working conditions. The new labour codes are based substantially on these recommendations.

The four labour codes consolidate 29 central labour enactments: the Code on Wages consolidates 4 laws, the Industrial Relations Code consolidates 3 laws, the Occupational Safety, Health and Working Conditions Code consolidates 13 laws, and the Social Security Code consolidates 9 laws.

All four labour codes came into effect on 21st November 2025. While the codes were passed by Parliament between 2019-2020, their implementation was delayed pending finalization of central and state rules. The codes apply uniformly across India, though states may have their own rules for certain provisions as labour is a concurrent subject.

Employers benefit from simplified compliance through consolidation of multiple laws, single registration for establishments, common licensing for factories and contract labour, web-based inspections, and fixed-term employment provisions. The threshold for standing orders has been raised to 300 workers, and the concept of Inspector-cum-Facilitator promotes advisory compliance assistance.

Workers benefit from universal minimum wage coverage (including unorganized sector), floor wage ensuring a basic standard across states, mandatory appointment letters, social security coverage for gig and platform workers for the first time, enhanced maternity benefits, pro-rata gratuity for fixed-term employees, and portability of benefits for inter-state migrant workers.

The new labour codes are four consolidated central laws that replace 29 earlier labour enactments in India: (1) the Code on Wages, 2019; (2) the Industrial Relations Code, 2020; (3) the Occupational Safety, Health and Working Conditions Code, 2020; and (4) the Code on Social Security, 2020. Together they form a single, modernised framework covering wages, industrial relations, workplace safety and social security across the organised and unorganised sectors.

The four new labour codes of India are the Code on Wages, the Industrial Relations Code, the Occupational Safety, Health and Working Conditions Code, and the Code on Social Security. All four codes came into effect on 21 November 2025. The central rules under the Wages, Industrial Relations and Social Security Codes were notified on 8 May 2026, and the rules under the OSH Code were notified on 9 May 2026. State rules continue to be notified separately as labour is a concurrent subject.

A gig worker performs work outside the traditional employer-employee relationship, often on short-term contracts or freelance basis. A platform worker accesses organizations or customers through online platforms or apps to provide services. Both categories are now eligible for social security schemes under the SS Code.

The Central Government may notify social security schemes covering life and disability cover, health and maternity benefits, old age protection, and other benefits. Aggregators may be required to contribute 1-2% of annual turnover to a social security fund for these workers.

Both employee and employer contribute 12% of basic wages plus dearness allowance to the Provident Fund. The SS Code applies to establishments with 20 or more employees. Smaller establishments can opt for voluntary coverage. The Central Board of Trustees administers the fund.

ESI applies to establishments with 10 or more employees where employee wages are within the prescribed ceiling. Benefits include medical care, sickness benefit, maternity benefit, disablement benefit, and dependants' benefit. ESIC runs a network of hospitals and dispensaries.

Women employees get 26 weeks paid leave for first two children and 12 weeks for subsequent children. Adopting mothers (child below 3 months) get 12 weeks. Additional benefits include nursing breaks until child is 15 months, crèche facility (where 50+ employees), and medical bonus.

Fixed-term employees are entitled to gratuity on a pro-rata basis. The calculation is 15 days' wages for each completed year of service. Regular employees need 5 years continuous service except in cases of death or disability.

The new labour codes introduce a risk-based, web-based inspection system conducted through a centralised portal. The concept of 'Inspector' has been changed to 'Inspector-cum-Facilitator' (IcF) to emphasize advisory compliance. Random computerised selection of establishments for inspection ensures transparency. A single IcF can inspect for compliance under all four codes, reducing multiple inspections.

The inspection scheme constitutes: (a) web-based inspection to be allotted by a centralised computer system; (b) calling of information electronically; (c) inspections to be generated by a computerised list; (d) inspection report to be uploaded within prescribed timeline; (e) deficiency based inspection strategy; and (f) facility for self-assessment and self-certification by employers.

An Inspector-cum-Facilitator (IcF) is an officer appointed by the appropriate Government to perform inspection and facilitation functions under the labour codes. The Chief Inspector-cum-Facilitator heads the inspection machinery and has supervisory powers. IcFs replace the traditional 'Inspectors' under previous labour laws and have both enforcement and advisory roles.

An IcF has powers to: (a) enter any establishment at reasonable times; (b) examine premises, plant, machinery, and articles; (c) inquire into accidents; (d) require production of registers and documents; (e) take samples; (f) examine any person; (g) conditional and limited power to seize documents; (h) photograph premises; and (i) exercise such other powers as may be prescribed. All inspections must be conducted through the web portal.

The IcF shall provide information to employers, employees and any other person regarding provisions of the codes and rules, advise employers on how to comply with provisions, make efforts to provide compliance information in local language and through accessible means, assist in registration and obtaining licenses, and provide guidance for maintaining records and registers.

Yes, certain offences under the labour codes may be compounded by the IcF with the permission of the appropriate Government. Compounding allows the offender to pay a specified amount in lieu of prosecution. However, offences which have caused death or grievous bodily injury or serious danger to life are not compoundable. Repeat offences within 5 years are also not compoundable.

An IcF does not directly impose penalties. Penalties for violations are imposed through the judicial process. However, IcF can initiate prosecution proceedings and file complaints. For compoundable offences, the IcF can accept compounding fees with government permission, which serves as an alternative to prosecution rather than a penalty.

For factories, the IcF has additional powers to: (a) prohibit employment in buildings that are unfit for use; (b) make orders requiring structural alterations; (c) prohibit use of dangerous machinery; (d) require medical examination of workers; (e) certify fitness of young persons for employment; and (f) order special inspections of factories involving hazardous processes.

For building and construction work, the IcF can: (a) prohibit work at dangerous construction sites; (b) require compliance with safety standards before work resumes; (c) investigate accidents and dangerous occurrences; (d) require structural stability certificates; (e) order provision of safety equipment; and (f) verify welfare measures for building workers.

During SS Code inspections, the IcF must: (a) verify employee enrollment and contributions to EPF/ESI; (b) check compliance with registration requirements; (c) examine records of contribution payments; (d) verify that benefits are being provided to eligible employees; (e) check compliance with gratuity provisions; (f) verify maternity benefit compliance; and (g) upload inspection report within 72 hours.

Once the draft Code on Social Security (Central) Rules, 2020 ("CSS Rules") are notified, the employer seeking registration for an establishment not already registered will be required to apply electronically in the form available on the Shram Suvidha Portal ("Portal") set up by the Ministry of Labour and Employment, Government of India, which would be signed digitally or as may be required on the Portal.

The employer may be required to provide details about the establishment, proof of identity and address of the employer(s). This is an indicative list and further details / documents required should be confirmed from the Portal once the CSS Rules are notified.

As per the SS Code, the employer in respect of an establishment already registered under the subsumed central labour laws (such as Employees' State Insurance Act, 1948, Employees' Provident Funds and Miscellaneous Provisions Act, 1952, etc.) will not require fresh registration, however they may be required to update the registration particulars on the Portal as per the CSS Rules.

As per the draft CSS Rules which are yet to be notified, the electronic certificate of registration will be issued immediately upon submission of the form, if the application is complete in all respects, as per the timeline prescribed in the CSS Rules.

In case there is no compliance undertaken the relevant registration, the draft CSS Rules currently prescribe that such deemed registration will expire within twenty four months from the date of registration.

The draft CSS Rules have currently prescribed that every building worker who has: (a) completed 18 years of age but has not completed 60 years of age, and (b) been engaged in any building or other construction work for not less than 90 days during the preceding 12 months. The draft CSS Rules prescribe that the eligible building worker shall submit an application form, electronically, with Aadhaar on self-declaration basis for registration to such authority on the specified portal of the Central Government.

As per the draft CSS Rules, the charges may be borne by the Central Government or State Government or State Building Workers' Welfare Board or by the building worker, either partly or fully, as may be specified by the State Government.

Every unorganised worker, gig worker or platform worker, who has completed the age of 16 years but not attained the age of 60 years, shall be eligible for registration. The eligible unorganised worker, gig worker or platform worker shall submit an application form, electronically, with Aadhaar on self-declaration basis for registration to such authority on the specified portal of the Central Government. The unorganised worker, gig worker or platform worker shall be required to update particulars such as current address, current occupation, period of engagement with the concerned platform(s) or aggregator(s), mobile number, skill, or any other particulars, from time to time.

Unorganised worker: As per the draft CSS Rules, the charges may be borne by the Central Government or State Governments or unorganised worker, either partly or fully, as may be specified by the appropriate Government. Gig worker or platform worker: As per the draft CSS Rules, the charges may be borne by the Central Government or aggregators or gig worker or platform worker, either partly or fully, as may be specified by the Central Government.

The OSH Code has done away with the requirement of separate registrations under the subsumed labour law legislations, and a singular registration is to be made by every employer of any establishment covered under the OSH Code, whether new or existing, within 60 days from the date of applicability of the OSH Code, or otherwise prescribed in the CSS Rules.

Once the draft Occupational Safety, Health and Working Conditions (Central) Rules, 2020 ("OSH Rules") are notified, the employer seeking registration for an establishment not already registered will be required to apply electronically in the form available on the Portal.

If there is change in the ownership or management or in any particulars in the application of registration of establishment, the same can be intimated to the registering officer electronically who shall make the amendment within 30 days of such change.

For closure, the employer will be required to undertake a host of actions, dependent on the scale and the nature of activity carried out at the establishment inter alia including: (a) giving notice to the appropriate authority, and seeking approval, if mandated; (b) settlement of all dues of employees including wages, gratuity, and statutory contributions and certify such payment to the relevant registering officer..

A trade union of workers can apply for registration if 10% of the workers in the establishment or 100 workers, whichever is less, are members of such trade union, provided the number of members does not fall below seven members. Further, a trade union seeking registration is necessarily required to have a constitution document which provides the rules in accordance with which the trade union shall function, further this document is required to include the particulars prescribed under Section 7 of the IR Code, including but not limited to: (i) name; (ii) the whole of the objects; (iii) purposes of utilisation of the funds; (iv) maintenance of a list of members; and (v) the manner in which the members of the executive can be elected.

Trade unions registered under the Trade Unions Act, 1926 are deemed to be registered under the IR Code and continue to have the same registration. However, they must update their details and ensure compliance with new requirements under the IR Code.

Yes, a registered trade union must maintain the criteria registration at all times, including a requirement of the minimum number of workers, who should be a part of the trade union. In case of a proposed cancellation of registration of the trade union, the registrar is required to give a prior notice of sixty days detailing the grounds on which it proposes to cancel the registration.

Under the OSH Code, 'occupier' means the person who has ultimate control over the affairs of the establishment. For establishments owned by a company with directors outside India, the local director or authorized representative in India is deemed the occupier. Obligations can be cast on foreign directors, but practically, the Indian director or representative bears primary responsibility.

The occupier is responsible for: (a) ensuring health, safety, and welfare of all workers; (b) providing and maintaining safe plant and systems of work; (c) safe handling, storage, and transport of articles and substances; (d) information, instruction, training, and supervision for safety; (e) maintaining clean and safe workplace; (f) providing protective equipment; (g) preparing health and safety policy; and (h) ensuring compliance with all provisions of the OSH Code.

Workforce management should balance operational needs with legal compliance. While fixed-term employment provides flexibility, over-reliance on contract labour carries risks: (a) prohibition on contract labour for core activities; (b) principal employer liability if contractor defaults; (c) potential 'sham' contract arrangements may be treated as direct employment; and (d) cost implications of equal wages. A balanced approach with clear policies is recommended.

Key changes for CXO/BOD attention: (a) negotiating union/council system replaces individual bargaining; (b) 51% membership needed for sole negotiating union status; (c) recognition valid for 5 years; (d) mandatory 14-day notice for strikes/lock-outs; (e) tribunal established for dispute resolution; (f) enhanced requirements for trade union registration; and (g) provisions for multi-establishment bargaining. Proactive engagement with unions is advisable.

The new wage definition has significant CXO-level implications: (a) restructuring required if basic wages <50% of CTC; (b) increased EPF/ESI/gratuity liability due to higher wage base; (c) impact on CTC budgeting and workforce costs; (d) need for salary structure audit and redesign; (e) disclosure requirements in financial statements; (f) potential retrospective claims from employees; and (g) need for board-level policy decisions on compensation philosophy.

Employers should: review and update employment contracts including appointment letters, revise HR policies to align with new definitions and provisions, audit current wage structures against new minimum wage and overtime requirements, update payroll systems for new calculation methods, train HR teams on the new framework, and review standing orders if applicable.

Key records include: register of employees, wage register, register of fines and deductions, overtime register, leave register, register of accidents, and inspection book. Electronic maintenance is permitted. Specific registers may be required for factories, contract labour, and building workers.

Labour is a concurrent subject, so both Central and State governments can make rules. While the codes provide the framework, states notify detailed rules for implementation. Employers must comply with applicable state rules which may vary on thresholds, procedures, and timelines. Some states have notified rules while others are still in draft stage.

Establishments must comply from the date the codes came into force on (21 November 2025). However, transitional provisions protect existing rights and benefits. Existing registrations continue for a specified period. Employers should prioritize immediate compliance items like appointment letters and wage structure review.

'Gig Worker' refers to a person who performs work or participates in a work arrangement and earns from such activities outside of traditional employer-employee relationship. They typically work on-demand, project-based, or freelance arrangements without long-term employment commitments.

Platform work' refers to a work arrangement outside of a traditional employer-employee relationship in which organisations or individuals use an online platform to access other organisations or individuals to solve specific problems or to provide specific services or any such other activities which may be notified by the Central Government, in exchange for payment.

'Platform worker' refers to a person engaged in or undertaking platform work. This includes delivery personnel for food delivery apps, ride-sharing drivers, freelancers on task-based platforms, and other workers who find work through digital platforms and apps.

The Central Government may frame and notify social security schemes for gig workers and platform workers on matters relating to: (a) life and disability cover; (b) health and maternity benefits; (c) old age protection; (d) education; (e) housing; and (f) any other benefit as may be determined by the Central Government. Aggregators may be required to contribute 1-2% of annual turnover towards these schemes.

Gig workers and platform workers must register on the portal designated by the Central Government. Registration requires: (a) Aadhaar number; (b) self-declaration of being a gig / platform worker; (c) details of the aggregator/platform through which they work; and (d) bank account details for benefit disbursement. Active registration status must be maintained to avail benefits.

Gig workers and platform workers work outside the traditional employer-employee relationship. The equal remuneration provisions under the Code on Wages apply to 'employees' which requires an employer-employee relationship. Therefore, the equal pay provisions may not directly apply to gig and platform workers, though they are protected against discrimination in the terms offered by platforms.

Yes. The very nature of gig and platform work allows workers to engage with multiple organisations or platforms simultaneously. There is no restriction on gig workers or platform workers from associating with multiple aggregators or accepting work from multiple sources. This flexibility is a defining characteristic of the gig economy.

Building or other construction work refers to the construction, alteration, repairs, maintenance or demolition of or, in relation to industrial development inter alia including buildings, streets, roads, railways, generation and distribution of electricity, water works, towers, cooling towers, transmission towers and such other work as may be specified by the appropriate government.

A 'building worker' refers to any person who is employed to do any skilled, semi-skilled or unskilled, manual, supervisory, technical or clerical work for hire or reward, whether the terms of such employment are express or implied, in connection with any building or other construction work.

The BOCW cess is a levy collected from every employer undertaking building or other construction work, for the purposes of social security and welfare of building workers at a rate between 1-2% of the cost of construction.

Cost of construction for a calculation of the BOCW cess refers to the estimated cost of construction including cost of material, labour, architectural designs, structural designs, electrical designs and the like, but categorically excludes the cost of land and the compensation payable to an employee in connection with any personal injury suffered in the course of employment.

The BOCW cess is required to be paid by the employer, post a self-assessment carried out by the employer, within sixty days (or such other period notified by the Central Government) from a completion of the relevant building or the construction work. The manner of payment of the cess shall be notified in the CSS Rules.

The manner of application and availing the refund for excess cess paid will be notified in the CSS Rules.

The penalty can be variable and will be determined by the authority prescribed by the Central Government in this regard, after the conduct of an inquiry. However, the penalty to be imposed by the relevant authority, cannot exceed the amount of cess that was to be paid.

A building worker who is aged between eighteen and sixty years of age and had been engaged in building or other construction work for at least ninety days in the preceding twelve months can be registered as a beneficiary.

The manner of disbursement of the benefits to a beneficiary will be notified in the rules under the SS Code.

Benefits illustratively include: (a) financial support, in the form of pension, death and disability benefits, maternity benefits, medical expenses for treatment of major ailments; (b) transit or hostel facilities; (c) skill development and other educational programmes run by the government for the benefit of the beneficiaries; and (e) any additional welfare scheme launched by the government for the welfare of the beneficiaries.