India brings into effect the Labour Codes – What Employers need to know
Introduction
In a significant development in the employment and labour law landscape, the Government of India, through the Ministry of Labour and Employment, has by way of a series of notifications on 21 November 2025, brought into effect the much awaited labour codes i.e., the Code on Wages, 2019 (Wage Code), Industrial Relations Code, 2020 (IR Code), Occupational, Safety, Health and Working Conditions Code, 2020 (OSH Code) and the Code on Social Security, 2020 (SS Code) (collectively referred to as ‘Labour Codes’).
The Labour Codes were passed by the Parliament of India way back in 2019 and 2020, repeal and consolidate 29 Central labour legislations.
In this update, we have sought to provide a brief overview of the notified Labour Codes and have briefly discussed our thoughts thereon.
Brief Overview of Labour Codes
- Code on Wages, 2019
The Wage Code, while making uniform definitions of wages, workers and employees’, provides for minimum wages, payment of wages, payment of bonus, equal remuneration and timely payments, applicable to all employees. It also introduces a national floor wage rate, subject to which, the States must determine the minimum wages payable.
The Wage Code replaces the erstwhile Payment of Wages Act, 1936; Minimum Wages Act, 1948; Payment of Bonus Act, 1965 and Equal Remuneration Act, 1976.
- Industrial Relations Code, 2020
The IR Code governs trade unions, standing orders and the dispute resolution mechanisms between employees and employers. It inter alia provides for rules dealing with layoffs, retrenchments, closure, unfair labour practices.
The IR Code replaces the erstwhile Trade Unions Act, 1926, Industrial Employment (Standing Orders) Act, 1946 and the Industrial Disputes Act, 1947.
- Occupational Safety, Health and Working Conditions Code, 2020
The OSH Code governs matters of safety, health and working conditions in factories, mines, docks, and other establishments, the registration and licensing of the establishments and welfare provisions such as working hours, leave entitlements and facilities provided to workers.
The OSH Code replaces 13 erstwhile Central labour laws, inter alia the Factories Act, 1948, Mines Act, 1952 and Contract Labour (Regulation and Abolition) Act, 1970.
- Code on Social Security, 2020
The SS Code provides for the social security schemes provided to workers, such as provident fund, employees’ pension fund, employees deposit linked insurance scheme, gratuity, and maternity benefit. It also provides for recognition of ‘gig and platform workers’, extending social security scheme to them, for the first time.
The SS Code replaces 9 erstwhile Central labour laws including the Employees’ State Insurance Act, 1948, Maternity Benefit Act, 1961, Payment of Gratuity Act, 1972, and Exchanges (Compulsory Notification of Vacancies) Act, 1959.
However, it is pertinent to note that although the SS Code expressly includes a provision repealing the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (EPF Act), the specific repeal provision with respect to EPF Act has not yet been notified.
Our Thoughts
The implementation of the Labour Codes is a much awaited and progressive move, overhauling India’s labour law regime. The Government’s decisive action to bring into effect the Labour Codes demonstrates a commitment to simplify compliance for employers, modernise the legal framework and strengthen the rights and protections available to workers.
While the notification of the Codes is a significant milestone, much depends on the subordinate Rules and Regulations, that are yet to be notified, which will ultimately operationalise the provisions. Until then, the extent of compliances to be followed remains unclear, for stakeholders in terms of implementation.
Nonetheless, stakeholders should begin reviewing their HR policies, manuals, employee handbooks, employment agreements, etc., to ensure they are aligned with the Labour Codes.
It is also pertinent to note that the Labour Codes do not repeal the State specific shops and establishments legislation, which will continue to operate independently.
The information contained in this document is not legal advice or legal opinion. The contents recorded in the said document are for informational purposes only and should not be used for commercial purposes. Acuity Law LLP disclaims all liability to any person for any loss or damage caused by errors or omissions, whether arising from negligence, accident, or any other cause.
