By Legum Pacific Editorial ·
Suppose you run a small garment unit and recently hired daily stitchers and a delivery app driver. Or suppose you work as a contract electrician on different sites. The law that used to be spread across many older Acts is now grouped into four broad Codes. These Codes aim to simplify rules that affect wages, social security, industrial relations and workplace safety.
What are the four Labour Codes?
The four Codes are: the Code on Wages, 2019; the Industrial Relations Code, 2020; the Code on Social Security, 2020; and the Occupational Safety, Health and Working Conditions Code, 2020. The Code on Wages was notified on 8 August 2019. The other three Codes were notified on 29 September 2020. The stated purpose is to replace and consolidate many older labour laws into fewer, clearer statutes.
What does each Code consolidate?
Code on Wages, 2019
- Consolidates: The Payment of Wages Act, 1936; The Minimum Wages Act, 1948; The Payment of Bonus Act, 1965; The Equal Remuneration Act, 1976.
- Main points from the text: establishes a statutory right to minimum wages for all employees across organised and unorganised sectors. Introduces a floor wage set by the Government, allows regional variation, and requires appropriate Governments to consider skill level, geography and job conditions when fixing wages. Gender-based discrimination in recruitment and wages is prohibited. Overtime must be paid at least twice the normal rate. The role of labour inspectors is reframed as “Inspector-cum-Facilitator”. Certain first-time non-imprisonable offences can be compounded. Some first-time offences replace imprisonment with fines (up to 50% of the maximum fine). Provisions on timely payment and prevention of unauthorised deductions extend to all employees.
Industrial Relations Code, 2020
- Consolidates: Trade Unions Act, 1926; Industrial Employment (Standing Orders) Act, 1946; Industrial Disputes Act, 1947.
- Main points from the text: introduces fixed-term employment (time-bound contracts) with parity in wages and benefits and gratuity eligibility after one year. Sets up a re-skilling fund funded by a contribution equal to 15 days’ wages for each retrenched worker, credited within 45 days. Trade union recognition rules and negotiating councils for unions are provided. Worker definition expanded to include some supervisory and sales staff earning up to ₹18,000/month. Thresholds for lay-off/retrenchment/closure approval raised from 100 to 300 workers (States may increase the limit). Standing orders threshold raised from 100 to 300 employees. Notice periods for strikes and lockouts and direct tribunal access after conciliation failure are included. Decriminalisation and compounding of minor offences and digital processes are introduced.
Code on Social Security, 2020
- Consolidates: The Employees’ Compensation Act, 1923; The Employees’ State Insurance Act, 1948; The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952; The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959; The Maternity Benefit Act, 1961; The Payment of Gratuity Act, 1972; The Cine-Workers Welfare Fund Act, 1981; The Building and Other Construction Workers’ Welfare Cess Act, 1996; The Unorganised Workers’ Social Security Act, 2008.
- Main points from the text: extends social security to all workers including unorganised, gig and platform workers, with definitions for “aggregator”, “gig worker” and “platform worker”. ESIC coverage becomes pan-India; establishments with fewer than 10 employees may opt in voluntarily. Time limits for EPF inquiries: five years to initiate, with recovery proceedings to be completed within two years (extendable by one). EPF appeal deposit reduced to 25% of the assessed amount. Self-assessment for construction cess is permitted. A Social Security Fund for unorganised, gig and platform workers is proposed. Wages definition is made more uniform. Commuting accidents are treated as employment-related. Fixed-term employees become eligible for gratuity after one year. Inspector-cum-Facilitator and digitisation are emphasised. Compounding rules for fines are provided in stated proportions.
Occupational Safety, Health and Working Conditions Code, 2020
- Consolidates: The Factories Act, 1948; The Plantations Labour Act, 1951; The Mines Act, 1952; The Working Journalists and other Newspaper Employees (Conditions of Service and Miscellaneous Provisions) Act, 1955; The Working Journalists (Fixation of Rates of Wages) Act, 1958; The Motor Transport Workers Act, 1961; The Beedi and Cigar Workers (Conditions of Employment) Act, 1966; The Contract Labour (Regulation and Abolition) Act, 1970; The Sales Promotion Employees (Conditions of Service) Act, 1976; The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979; The Cine-Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981; The Dock Workers (Safety, Health and Welfare) Act, 1986; The Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996.
- Main points from the text: sets a uniform electronic registration threshold of 10 employees and moves to “one registration, one license, one return”. Government can extend the Code to hazardous establishments with even one worker. The inter-state migrant worker definition is widened and benefits like annual travel allowance and portability of PDS and social security are mentioned. Appointment letters specifying job details, wages and social security are required. Women can work in all establishments and at night with consent and safety measures. Safety committees are required in establishments with 500 or more workers. Revised factory thresholds raise applicability for small units (10 to 20 with power; 20 to 40 without power). Contract labour thresholds changed from 20 to 50 contract workers. Principal employers are to provide welfare facilities and can be held liable for unpaid wages of contract workers. Normal working hours are capped at 8 hours/day and 48 hours/week; overtime requires consent and is paid at twice the regular rate. Inspector-cum-Facilitator, decriminalisation, and compounding of offences are included. Courts can direct at least 50% of fines to be paid as compensation to victims in case of injury or death.
What does this mean for ordinary workers and small businesses?
If you are an employee, the Codes say that minimum wages apply across sectors and many social security rules reach gig and platform workers. If you are in a small business, the Codes aim to reduce multiple registrations and introduce single digital returns. Inspectors are described as facilitators to help compliance instead of only enforcement. Several older criminal penalties are replaced by fines and compounding options, as described above.
Key points
- Four Codes replace 29 older labour laws and aim for single registration, single licence and single return.
- Wages, industrial relations, social security and workplace safety are each dealt with in one Code.
- The Codes widen coverage (for example, universal minimum wage and social security for gig workers) and change thresholds for compliance.
- Inspectors are reframed as “Inspector-cum-Facilitator” and digital processes are emphasised.
- Many minor offences are decriminalised and can be compounded by paying specified portions of the maximum fine.
- Several benefits are expanded (ESIC pan-India, gratuity for fixed-term employees after one year, cover for commuting accidents).
Laws referred to
- Code on Wages, 2019
- The Payment of Wages Act, 1936
- The Minimum Wages Act, 1948
- The Payment of Bonus Act, 1965
- The Equal Remuneration Act, 1976
- Industrial Relations Code, 2020
- Trade Unions Act, 1926
- Industrial Employment (Standing Orders) Act, 1946
Official sources
This guide explains what the law itself says. Court rulings interpreting these provisions can also affect how they apply in a particular case. It states the position under the official texts listed above, as at 7 November 2026.
Source: Official text (static.pib.gov.in) (opens in a new tab)