4 New Labour Codes explained: this guide covers what 4 New Labour Codes 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's fragmented labour law regime — comprising 29+ central Acts — has been consolidated into 4 Labour Codes passed in 2019-2020. These codes aim to simplify compliance, extend social security to unorganised workers, and balance employer flexibility with worker protection. Though passed, implementation depends on states framing their rules.
The 4 Labour Codes
| Code | Year | Laws Subsumed |
|---|---|---|
| Code on Wages | 2019 | Minimum Wages Act, Payment of Wages Act, Payment of Bonus Act, Equal Remuneration Act |
| Industrial Relations Code | 2020 | Industrial Disputes Act, Trade Unions Act, Industrial Employment (Standing Orders) Act |
| Social Security Code | 2020 | EPF, ESI, PMSYM, EDLI, Maternity Benefit Act, Payment of Gratuity Act, Building & Construction Workers Act, Unorganised Workers Act |
| OSH Code (Occupational Safety) | 2020 | Factories Act, Mines Act, Dock Workers Act, Contract Labour Act, Beedi & Cigar Workers, Building & Construction Workers, Plantations Labour Act (13 Acts) |
Code on Wages 2019 — Key Changes
- Universal applicability — covers all employees regardless of wage ceiling
- Concept of "floor wage" — national minimum wage below which no state can set minimum wages
- Bonus: applicable to employees with salary up to Rs. 21,000/month; minimum 8.33%, maximum 20%
- Wages must be paid by 7th (monthly) / 14th (fortnightly) / 7th (weekly)
- Wages include basic + DA + retaining allowance — not HRA, bonus, PF, gratuity
Industrial Relations Code 2020 — Key Changes
- Fixed-term employment contracts permitted in all sectors (no restrictions)
- Threshold for seeking government permission to retrench/layoff/close changed to 300 workers (from 100)
- Works committees mandatory for establishments with 100+ workers
- Strikes: 60-day notice required in public utilities; 14-day notice in other establishments
- Trade union recognition: TU with 51%+ membership gets sole bargaining agent status
Social Security Code 2020 — Key Changes
- PF extended to all establishments with 20+ workers (same as before)
- ESI extended to establishments with 10+ workers; employee contribution: 0.75%, employer: 3.25%
- Gratuity for fixed-term employees: payable even before 5 years (proportionate to tenure)
- Gig workers and platform workers to be covered by social security
- Unorganised workers' social security fund
OSH Code 2020 — Key Changes
- Unified registration for establishments
- 10 hours max working hours per day; 48 hours per week
- Contract labour: if principal employer discontinues contract work, workers to be absorbed
- Annual health check mandatory for hazardous process workers above 45 years
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