A simplified and updated overview of the Labour Codes and their expected impact on registrations, registers, returns, remittances, and compliance requirements. This note captures the current status, future changes, and actions to be taken once the Central and State Governments notify the Rules.
1. Registrations
Shops & Establishments Registration
- No change.
- S&E Acts are outside the Labour Codes, and registrations will continue as per respective State laws.
Contract Labour Registration
- No action required as of now.
- OSH Code Rules (Central & State) are not yet enforced.
- Once notified, a combined registration will apply for CLRA, BOCW and ISMW through a unified portal.
PF / ESIC Registration
- A consolidated registration window exists on Shram Suvidha.
- Companies incorporated after Feb 2020 receive PF/ESIC registration by default through the MCA portal.
- No additional action is required for entities already registered.
ESIC – Voluntary & Mandatory Registration
- Voluntary registration remains available for establishments with <10 employees.
- Mandatory registration applies to establishments performing hazardous activities, regardless of employee count.
2. Registers
S&E Establishments
- Registers under the State Shops & Establishments Act will continue unchanged.
- Registers under Minimum Wages, Payment of Wages, Payment of Bonus and Equal Remuneration Acts will be merged into Integrated Registers once States notify Rules under the Code on Wages.
- UCS will update systems when respective States publish the new Labour Code formats.
Contract Labour Registers
- Under OSH Code, contractors will need to maintain consolidated registers upon notification of State OSH Rules.
3. Returns
- Integrated returns under each Code will become applicable only after State Rules are enforced.
- Government portals will need to be updated to accept integrated returns.
- Until then, UCS will file returns as per existing formats.
Employment Exchanges → SS Code “Career Centre”
- The SS Code, Chapter IV, introduces Career Centres, intended to centralise vacancy reporting; however, implementation is pending rules + IT system rollout.
- ER-I / X-6 continues today. SS Code “Career Centre” is the future system, NOT yet active.
- Repeal of EE Act happens only after full rollout. Vacancy reporting will move online under SS Code. Employers must continue the old compliance now.
4. Remittances
- PF & ESIC wage ceilings remain unchanged under the SS Code.
- No change in existing contribution process unless the Government unifies wage ceilings in the future.
- Professional Tax and Labour Welfare Fund remain outside the Labour Codes and continue under State laws.
5. Key Impacts from Labour Codes (Once Enforced)
a) Floor Wages
- Central Government will notify national floor wages after consultation.
- States will revise minimum wages accordingly.
- Until then, existing State minimum wages continue.
b) Gratuity for Fixed Term Employees
- SS Code entitles fixed-term employees to gratuity after 1 year.
- Awaiting clarity; advisable to hold implementation until Rules are notified.
c) Social Security for Gig Workers
- Gig worker registration exists on Shram Suvidha.
- Contribution percentages for aggregators are yet to be notified.
d) Definition of Wages (50% Rule)
- Uniform wage definition pending implementation.
- Until notified, existing wage definitions continue.
- Basic + DA should form ≥50% of Gross only after formal enforcement.
Impact on Statutory Components
- PF: No impact where PF is capped at ₹15,000.
- ESI: No impact; ESIC is based on gross wages.
- Bonus: Bonus continues based on minimum wages; wage restructuring may push some employees out of bonus eligibility.
- Gratuity: Will increase if Basic + DA is raised to 50%.
- Recommendation: Implement structural changes only after clarity from Government.
e) PF Limitation Period
- Inquiry limited to 5 years;
- Assessment orders within 2 years;
- Power to reopen cases suo moto abolished.
6. OSHWC Code – Key Changes (Future)
a) Contract Labour Threshold
- Threshold increases from 20 → 50 workers.
- Applicable only after Central + State OSH Rules are notified.
b) Crèche Requirement
- Crèche mandatory for 50+ employees under OSH Code.
- This provision will come into force only after the Central and State OSH Rules are notified.
- Until then, the crèche requirement continues under the Maternity Benefit Act, and sector-specific crèche obligations under older laws remain applicable.
c) Working Hours Flexibility
- Up to 12 hours/day, 48 hours/week,
- 125 hours overtime per quarter,
- Women permitted in night shifts.
- Enforceable only after OSH Rules are notified.
d) Core Activity Restriction
- Principal Employers cannot engage contract labour in core activities, except in defined exceptional cases (seasonal, intermittent, specialised, sudden load).
- This is a major shift from CLRA.
e) Four-Day Work Week
- Permitted under OSH Code: 12 hours × 4 days = 48 hours.
- Not in force until Rules are notified.
- Once notified, this flexibility will apply to Factories, Construction establishments, Mines, Motor transport undertakings, Plantations& Any other establishment notified by Government under OSH Code
7. S&E Act – No Change
The Shops & Establishments Act remains fully applicable.
Therefore, for S&E establishments:
- Working hours
- Weekly offs
- Leave
- National/Festival Holidays
- continue as per State S&E laws.
8. Health Check-Up
- Under the Occupational Safety, Health and Working Conditions (OSHWC) Code, 2020, employers are required to provide a free annual health check-up for employees in establishments covered under the Code.
- Section 14(1)(b) empowers the Central or State Government to prescribe the age or class of employees and the nature of medical examinations through the Rules.
- As of today, the final OSH Rules have not been notified. This requirement will apply as prescribed once the Rules are officially notified.
9. Alignment of Existing Acts with the Labour Codes
| Sl. No. | Existing Act | Status Under 4 Labour Codes | Mapped To Which Labour Code | Remarks |
| 1 | Minimum Wages Act, 1948 | Subsumed | Code on Wages | Replaced entirely |
| 2 | Payment of Wages Act, 1936 | Subsumed | Code on Wages | Replaced entirely |
| 3 | Contract Labour (Regulation & Abolition) Act, 1970 | Subsumed | OSHWC Code | CLRA is merged into OSHWC (Part on Contract Labour) |
| 4 | Payment of Gratuity Act, 1972 | Subsumed | Code on Social Security | Gratuity fully integrated in SS Code |
| 5 | Equal Remuneration Act, 1976 | Subsumed | Code on Wages | Integrated into Wages Code (Equal pay for equal work) |
| 6 | Maternity Benefit Act, 1961 | Subsumed | Code on Social Security | MB Act is inside SS Code framework |
| 7 | Payment of Bonus Act, 1965 | Subsumed | Code on Wages | Bonus incorporated in Wages Code |
| 8 | Industrial Disputes Act, 1947 | Subsumed | Industrial Relations Code | Entire ID Act replaced |
| 9 | Employees Provident Fund Act, 1952 | Subsumed | Code on Social Security | EPF provisions merged into SS Code |
| 10 | Employees State Insurance Act, 1948 | Subsumed | Code on Social Security | ESI Act subsumed fully |
| 11 | Employment Exchanges Act, 1959 | Subsumed (with modification) | Code on Social Security | Vacancy notification provisions included in SS Code |
| 12 | Shops & Commercial Establishments Act, 1961 | NOT subsumed | Outside Codes | State law continues; OSHWC applies only to “establishments” defined therein, not as a replacement for S&E Act |
| 13 | Labour Welfare Fund Act (State Acts) | NOT subsumed | Outside Codes | All LWF Acts continue independently (state subject) |
| 14 | National & Festival Holidays Act (various states) | NOT subsumed | Outside Codes | State NFH Acts remain fully applicable |
| 15 | POSH Act, 2013 | NOT subsumed | Outside Codes | POSH continues exactly as-is (no integration) |
| 16 | Profession Tax Act (State Act) | NOT subsumed | Outside Codes | State law — continues unchanged |
| 17 | Child Labour (Prohibition & Regulation) Act, 1986 | NOT subsumed | Outside Codes | Continues independently; NOT merged with OSH Code |
| 18 | Transgender Persons (Protection of Rights) Act, 2019 | NOT subsumed | Outside Codes | Social welfare legislation, continues independently |
| 19 | Rights of Persons with Disabilities Act, 2016 | NOT subsumed | Outside Codes | Welfare & reservation legislation; continues |
10. Anticipated Government Next Steps
Central Government’s next steps:
The Government’s action plan for implementing the Labour Codes focuses on finalising Rules in the next couple of months,
- building IT systems,
- Operationalise Social Security Fund,
- Establish State and Central Social Security Boards and
- preparing employers and states through structured capacity-building and
- support initiatives.
- web based inspection mechanism.
State / UT Government’s next steps:
- Framing of draft rules under the codes,
- Constitution of Social Security Board,
- Social Security Fund,
- Framing of Schemes,
- Training of enforcement machinery,
- IT infrastructure,
- web based inspection mechanism.
11. Enforcement of Sections
The Sections of the codes (Code on Wages, Code on Social Security, OSH&WC Code, IR Code) which do not require any Rules, Regulations, By-laws, schemes, etc become effective from the date of enforcement of codes. The sections of the Codes which require Rules, Regulations, Notifications, By-laws, etc become effective after following due process.
There will be no legal vacuum during the intervening period i.e. between code enforcement and Rules implementation. The existing Acts and Rules, Regulations, Notifications, By-laws will remain effective.
| Aspect When it becomes effective | Enforcement of Certain Sections | Sections Requiring Rules (Follow Due Process) Only after relevant Central & State Rules are finalized and notified |
| Dependency on Rules | No rules required – provisions are self-executing | Rules, bye-laws, forms, notifications must be published before enforcement |
| Nature of Provisions | Definitions, basic obligations, powers of authorities, overriding clauses, enabling provisions | Procedural, operational, compliance-driven sections needing detailed rules |
| Examples of Activities Covered | – Definitions (employer, employee, wages, etc.) – General duties of employer – Penalty sections (where no prescribed forms needed) – Powers of inspectors – Repeal & savings clauses | – Registration & licensing processes (OSH, Contract License) – Minimum wages fixation rules – Working hours & overtime conditions – Social security schemes (gig workers, PF, ESI) – Creche standards – Inspection scheme – Standing orders, – dispute processes |
| Effect on Employers | Conceptual provisions apply immediately but require no action until procedural rules are issued | Employers must wait for rules to understand detailed procedures and compliance formats |
| Government Process | Direct enforcement through notification of Code commencement | Feedback → Finalization → Publication → Notification → Enforcement |
| Impact on Existing Laws | No disruption; old laws continue where rules are not ready | Old laws are repealed only when corresponding rules are notified |
| Illustrative Code Sections (Examples) | – Wage Code: Definitions, equal remuneration principle – OSH Code: General duty of employer – SS Code: Power to frame schemes – IR Code: Recognition of negotiating union (concept) | – PF/Gratuity calculations – Bonus calculations & registers – Working hour rules (12 hours) – Contract labour licensing – Safety standards & medical check-ups – Social security fund rules |