On 13 June 2026 the Ministry of Labour and Employment finalised the central rules for four consolidated Labour Codes, integrating 29 legacy central statutes into a single regulatory architecture.
The Four Labour Codes
- Code on Wages, 2019: Amalgamates Payment of Wages Act, Minimum Wages Act, Payment of Bonus Act and Equal Remuneration Act; introduces a statutory national floor wage and a uniform definition of “wages”.
- Industrial Relations Code, 2020: Combines Trade Unions Act, Industrial Employment (Standing Orders) Act and Industrial Disputes Act; revises thresholds for closures, retrenchment and union recognition.
- Code on Social Security, 2020: Replaces nine laws including EPF, ESI, Maternity Benefit and Gratuity Acts; extends coverage to unorganised, gig and platform workers and creates a Social Security Fund.
- Occupational Safety, Health & Working Conditions Code, 2020: Merges 13 statutes including Factories Act and Mines Act; standardises safety norms across sectors.
Key Implementation Challenges
- Co-federal Rulemaking: Labour is on the Concurrent List; central rules notified but only seven states have fully notified final rules while 29 states/UTs remain at draft stage.
- Union Recognition: Sole negotiating council requires 51% membership; 20% needed for a seat; 30% threshold for overall recognition.
- Retrenchment Thresholds: Prior government permission not required for establishments up to 300 workers (previous limit 100).
- Fixed-term Employment: Pro-rata gratuity after one year; no statutory cap on successive renewals.
- National Floor Wage: Central discretion in methodology; not linked by rule to specific CPI or caloric norms (judicial precedent: Workmen v. Reptakos Brett & Co.).
- Gig Worker Financing: Social Security Fund envisages aggregator contributions (indicative 1–2% of turnover); no autonomous registry for platform workers.
- Digital Identifier: e-Shram functions as the Aadhaar-seeded national database for unorganised workers.
- 50% Basic Salary Rule: Basic pay plus retaining allowances must constitute at least 50% of total remuneration; excess allowances are notionally added back to basic.
IASPOINT Booster Facts
- Constitutional Allocation: Labour appears under entries 22–24 of the Concurrent List (Seventh Schedule); certain safety matters (mines, oilfields) fall under Union List.
- Model Standing Orders, 2026: Distinct templates issued for mining, manufacturing and services sectors.
- Worker Re-skilling Fund: Employers must deposit an amount equal to 15 days’ wages per retrenchment; transfer to worker within 45 days.
- ILO Engagement: India presented the codes at the 114th International Labour Conference, citing expanded social protection coverage to 68.4% of the population.