Draft Rules for New Labour Codes

Key Highlights on Draft Rules under Labour Codes

Constitutional & Legislative Framework

• The government is seeking public comments on draft rules concerning the following four labour codes:

  1. Code on Wages
  2. Code on Social Security
  3. Industrial Relations Code
  4. Occupational Safety, Health and Working Conditions (OSH) Code.

• The codes were notified by the government in November after being passed by Parliament five years ago.

Proposed Regulations and Rules

• Maximum Working Hours:

  • Weekly working hours are capped at 48 hours.
  • Daily working hours to be determined by the Central Government, with intervals and spread-over time specified.

• Women Workers' Night Shift:

  • Women permitted to work night shifts (7 PM to 6 AM) must provide written consent.
  • Employers are required to ensure safe transport and well-lit workplaces for female employees.

• Contract Employment:

  • Workers employed on fixed-term contracts become eligible for gratuity after one year of service, a change from the previous five-year requirement for permanent workers.

• Unorganised Workers:

  • Mandatory Aadhaar-linked registration is required for all unorganised workers aged above 16 years.
  • A National Social Security Board for gig and platform workers will be established, comprising members from various sectors.

• Gratuity Calculation:

  • Gratuity provisions will be enforced from November 21, 2025.
  • Defined work performance incentives or ESOPs will not be included in wage calculations.

Minimum Wage Determination

• The minimum wage will be set based on a standard family of four, considering:
  • Daily intake of 2,700 calories per person.
  • Additional factors such as house rent, fuel costs, children’s education, and medical expenses.
• A technical committee is tasked with fixing these minimum wages.

Transitional Provisions

• Existing rules remain active until the new rules are finalized.
• Final rules are expected by March, aiming for full implementation by April 1, the start of the new financial year.

Additional Information

• The rules facilitate electronic applications for contractors working across multiple states and set a timeline of 45 days for approval/disapproval.
• The Ministry of Labour clarified that all remuneration, including allowances beyond a specified limit, will be considered under ‘wages’ according to the newly drafted definitions.

Implications for Stakeholders

• Employers and industry stakeholders are encouraged to provide feedback during the 30-45 day public comment window on the draft rules.
• These labour code reforms are expected to impact work-life balance, job security, and the regulation of employment in various sectors, particularly for women and unorganised workers.

Conclusion

These draft rules represent significant updates to India's labour laws, addressing work conditions, employee rights, and the framework for wages and social security. Stakeholders in the economy, especially in the labour sector, should prepare for adaptations to meet the forthcoming regulatory changes.