1. Introduction
The Government of India has consolidated 29 labour laws into 4 Labour Codes to simplify and modernize labour regulations. These Codes aim to bring uniformity, improve compliance efficiency, protect workers, and promote ease of doing business.
The Four Labour Codes:
- Code on Wages, 2019
- Industrial Relations (IR) Code, 2020
- Code on Social Security, 2020
- Occupational Safety, Health & Working Conditions (OSHWC) Code, 2020
This handbook provides a concise, practical understanding of all four labour codes along with key changes and impacts on employers.
2. Code on Wages, 2019
Previous Acts Merged
- Minimum Wages Act, 1948
- Payment of Wages Act, 1936
- Payment of Bonus Act, 1965
- Equal Remuneration Act, 1976
Key Provisions
- Uniform definition of "Wages" with 50% cap on allowances
- Minimum wages applicable to all employees
- Floor wage introduced
- Equal pay for equal work
- Digital compliance and single return
- Higher penalties for violations
Impact on Employers
- Increase in PF, Gratuity, Bonus, Overtime costs
- Salary restructuring required
- Contractor cost increase
- Stricter enforcement
3. Industrial Relations (IR) Code, 2020
Previous Acts Merged
- Industrial Disputes Act, 1947
- Trade Unions Act, 1926
- Industrial Employment (Standing Orders) Act, 1946
Key Provisions
- Standing Orders threshold increased to 300 workers
- Government approval for retrenchment/closure only if 300+ employees
- Legal recognition of fixed-term employment
- Negotiating union with 51% membership
- 14-day mandatory strike notice for all industries
Impact on Employers
- Greater flexibility in manpower planning
- Simplified union management
- Reduced risk of sudden strikes
- Faster dispute resolution
4. Code on Social Security, 2020
Previous Acts Merged
- PF Act, ESI Act, Maternity Benefit Act, Gratuity Act, Bonus Act, etc.
- Unorganised Workers Social Security Act, Cess Acts
Key Provisions
- Universal social security framework
- PF, ESI, Gratuity under a single code
- Gig and platform workers included
- Gratuity eligibility for fixed-term workers
- Uniform wage definition for PF/Gratuity
- Single registration of unorganised workers
Impact on Employers
- Increased gratuity cost for fixed-term employees
- Higher PF liability due to wage definition
- New compliance for contractors and gig workers
- More digital records and inspections
5. OSHWC Code (Occupational Safety, Health & Working Conditions)
Previous Acts Merged
- Factories Act, CLRA, Mines Act, Inter-State Migrant Workers Act, etc.
Key Provisions
- Uniform standards for safety and working conditions
- 8 hours/day, 48 hours/week – standard across India
- Mandatory registration of inter-state migrant workers
- Single license for factories, contract labour, gig workers
- Women allowed in night shifts with safety measures
- Annual health check-ups for certain categories
Impact on Employers
- Additional EHS compliance
- Better workforce utilization due to standardized hours
- New documentation for migrant and contract workers
- Need for safety committees and audits
6. Cross-Code Consolidated Comparison
| Area |
Earlier |
After Labour Codes |
Impact |
| Wage Definition |
Different in each Act |
Uniform (50% cap rule) |
Higher statutory payouts |
| Minimum Wages |
Only scheduled industries |
Universal coverage |
Wage bill increase |
| Layoffs/Closure |
100+ approval |
300+ approval |
More flexibility |
| Working Hours |
State-based |
Uniform 48-hour rule |
HR planning easier |
| Contractor Licensing |
Different laws |
Single license |
Easier but stricter |
| Gig Workers |
Not covered |
Included |
New compliance requirements |
| Inspections |
Manual |
Digital |
Transparent but strict |
| Returns |
Multiple |
Single unified return |
Simplified compliance |
7. Employer Action Points
A. Payroll & HR
- Restructure salary as per 50% wage rule
- Recalculate PF, Bonus, Gratuity
- Align working hours and leaves
B. Legal & Compliance
- Update standing orders (if applicable)
- Prepare for digital inspections
- Maintain new registers and records
C. Contractor Management
- Revise contracts
- Verify contractor compliance
D. EHS & Workplace Safety
- Strengthen safety standards
- Register migrant and unorganised workers
- Train EHS committees
8. Conclusion
The New Labour Codes aim to simplify laws, protect workers, and support business growth. Companies should proactively adjust payroll, HR policies, compliance systems, and workforce management practices to ensure full readiness.