India’s new Labour Codes consolidate 29 fragmented laws into four coherent statutes, modernising regulation and reducing uncertainty for businesses and workers.

About Four Consolidated Labour Codes

• Code on Wages: Standardises wage definitions and ensures equal pay for equal work for men and women.
• Code on Industrial Relations: Simplifies dispute resolution and promotes cooperative employer–worker relations.
• Code on Social Security: Extends social security to all workers, including gig and platform workers, and eases settlement of dues.
• Occupational Safety, Health and Working Conditions (OSH&WC) Code: Harmonises safety and health standards across sectors to ensure safer workplaces.

Expected Benefits of New Labour Codes

• Uniform Definitions: A single, consistent definition of “wage,” “worker,” and related terms now applies nationally, removing inconsistencies that earlier complicated compliance.
• Written Appointment Letters: Every worker must receive a written contract, improving transparency in employment terms and reducing informal, undocumented work arrangements.
• Timely Wage Payments: The Codes standardise the timeline for salary disbursal across establishments, ensuring predictability for workers and clarity for employers.
• Lower Compliance Burden: A single registration and single return filing replace the earlier requirement of submitting multiple forms to different authorities. 
  • This reduces transaction costs and supports the transition of small firms into medium-sized enterprises.
• Gig and Platform Workers: For the first time, gig and platform workers such as food-delivery executives and app-based drivers are recognised under law. 
  • Earlier laws, framed before the digital economy, entirely excluded them. 
  • The new Codes allow these workers to become eligible for social security schemes.
• Women’s Empowerment: Women are now permitted to work night shifts across states, provided employers ensure safety measures such as transportation, security, and supervision. 
  • IMF estimates suggest that if women’s labour-force participation equated that of men, India’s GDP could rise by nearly 27%.
• Greater Worker Security and Productivity: Written contracts, provident fund contributions, and medical benefits provide workers with security, reducing attrition.
  • When workers stay longer and feel protected, employers invest more in their training, raising overall efficiency.
• End of ‘Inspector Raj’: The shift towards faceless assessment allows firms to self-assess compliance. When inspections are required, they occur digitally, reducing opportunities for harassment, discretion, or rent-seeking by officials.

Challenges in Implementation of New Labour Codes

• Need for Federal Alignment: Labour is a Concurrent List subject, while the Centre notifies laws, states must frame and align rules, but uneven progress and political differences often delay uniform implementation.
• Mindset and Administrative Culture: Officials accustomed to discretionary enforcement may resist change. Without a shift in administrative behaviour, corruption risks may persist despite faceless systems.
• Low Awareness: Many small shopkeepers and micro-establishments remain unaware of the new Codes or their registration processes, limiting the intended benefits at the grassroots.

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Conclusion

The four Labour Codes aim to modernise India’s labour market. If effectively implemented, the Codes can play a significant role in advancing India’s vision of a Viksit Bharat by 2047.

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