4 Labour Codes 2020: Code on Wages, IR Code, OSH Code and Social Security Code

4 Labour Codes 2020 explained: this guide covers what 4 Labour Codes 2020 means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.

India consolidated its complex web of 29 central labour laws into 4 Labour Codes between 2019-2020. These Codes represent the most comprehensive labour law reform since independence. Though enacted, implementation is pending as states are still drafting rules.

Overview of 4 Labour Codes

Code on Wages 2019 — Key Provisions

National Floor Wage

Central Government sets a National Floor Wage (NFW) below which no state can fix minimum wages. This prevents a "race to the bottom" in wage competition. Minimum wages for unskilled/semi-skilled/skilled/highly-skilled by sectors.

Universal Coverage

All employees (including piece-rate, time-rate) in all establishments covered — no minimum employee threshold. Previously, Minimum Wages Act applied only to scheduled employments.

Bonus

Retained bonus provisions (20% max, 8.33% min) but extended to all establishments with 20+ employees and employees earning up to Rs.21,000/month (salary cap for eligibility).

Industrial Relations Code 2020 — Key Changes

Retrenchment and Closure Threshold

• Old law: Establishments with 100+ workers needed government permission for retrenchment/lay-off/closure
• New Code: Threshold raised to 300+ workers
• States can raise the threshold further (but not lower it)

Fixed-Term Employment

Formalized fixed-term employment contracts — employees on fixed-term contracts get same benefits (PF, ESI, gratuity pro-rata) as permanent employees. Proportionate gratuity for fixed-term workers completing 1 year.

Standing Orders

Mandatory standing orders now only for establishments with 300+ workers (previously 100+).

Strikes and Lockouts

60-day notice required before strike in all industries (not just essential services). Prohibition on strikes during conciliation, arbitration, and tribunal proceedings.

OSH Code 2020 — Key Provisions

• Universal health and safety obligations applicable to all establishments with 10+ workers
• Working hours: Max 8 hours/day, 48 hours/week; overtime: 2x wage rate
• Annual leave: 1 day for every 20 days of work (previously 1 in 20 for adults in factories)
• Crèche facilities mandatory in establishments with 50+ women workers
• Inter-State Migrant Workers: registration of establishments hiring 10+ migrants; welfare facilities; return journey allowance
• Single licensing for factories instead of multiple approvals

Social Security Code 2020 — Key Extensions

Gig Workers and Platform Workers

• First-ever legal recognition of gig workers (app-based delivery, cab drivers) and platform workers
• Aggregators (Swiggy, Zomato, Ola, Uber) to contribute 1%-2% of annual turnover to a Social Security Fund for these workers
• Workers can access life/disability insurance, accident benefits, provident fund, health schemes

Retaining Core Provisions

• EPF: 12% employee + 12% employer (8.33% EPS pension fund)
• ESI: 0.75% employee + 3.25% employer (reduced from 1.75%/4.75%)
• Gratuity: 15/26 formula (15 days per year of service); 5-year minimum service
• Maternity benefit: 26 weeks (for first 2 children); 12 weeks for 3rd child and beyond

Implementation Status (2025)

• All 4 Codes received Presidential assent (2019-2020)
• Central rules partially framed; pending complete notification
• States required to frame their own rules under IR Code and OSH Code (concurrent list)
• Several states (Gujarat, UP, MP) have drafted rules; others pending
• Existing 29 laws continue to operate until central + state rules fully notified