Nearly four months after the draft rules were published for stakeholder consultation, the Central government on Friday notified final rules under the four labour codes, bringing into force a unified framework aimed at modernising labour regulations, ensuring minimum wages, and extending universal social security to all workers.
The four codes, 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, came into effect on November 21. However, their full implementation required the framing of rules. The Ministry of Labour and Employment published draft rules on December 30, for stakeholder feedback and were subsequently notified following legal vetting. Since labour is a concurrent subject under the Constitution, both the Centre and states are required to notify rules for nationwide enforcement of the four codes.
The new framework introduces several worker-friendly measures, including mandatory issuance of appointment letters, free annual health check-ups for workers aged 40 and above, and equal pay, work, and opportunity for women including provisions for working different shifts. It also caps weekly working hours at 48, with at least one weekend off or rest day and overtime payment for additional hours.
The Occupational Safety, Health and Working Conditions Code rules address working hours, overtime, contract labour obligations, mandatory appointment letters, and annual medical examinations for specified workers, with a focus on strengthening safety outcomes. The new rules mandate that workers are entitled to overtime wages at twice the normal rate (double wages) for work exceeding 8 hours in a day (for daily-rated workers) or 48 hours in a week (for others).
Overtime must be paid at the end of each wage period, with fractions of an hour calculated as 30 minutes or a full hour. Employers are prohibited from allowing any worker to perform more than 144 hours of overtime in any quarter of the year. Employers must maintain detailed electronic or manual records of overtime hours and payments in the prescribed register, and separate mention of overtime wages is required in wage slips.
Puneet Gupta, Partner, People Advisory Services – Tax, EY India, said the notification of Central Rules across all four labour codes marks a critical transition from legislative intent to on-ground implementation. The Central Rules framed under three of the codes, namely the Code on Wages, the Industrial Relations Code, and the Occupational Safety, Health and Working Conditions Code, will predominantly apply to establishments for which the Central government is the ‘appropriate government’. “This includes sectors such as telecommunications, banking and insurance, mines, oil fields, major ports, air transport, as well as central public sector undertakings and their contractors. In contrast, the Central rules under the Code on Social Security have a much wider footprint and will extend to establishments operating across more than one state.”
Gupta noted that the rules will influence state-level frameworks: “Notably, these final Central Rules are also expected to serve as the foundation for States to frame and operationalise their respective State Rules under the labour codes. The practical impact of these rules for most organisations (especially under the 3 codes) will depend on the extent to which State Rules mirror the Central framework.”
Under the Code on Social Security, the rules offer procedural clarity for registration of gig and platform workers, creche facilities, ESI contributions, and nominations, while promoting a digital, platform-driven approach to expand coverage and improve transparency.
Under the Industrial Relations Code, the rules reinforce grievance redressal, disciplinary processes, dispute resolution, retrenchment procedures, and contributions to the reskilling fund. The issuance of Model Standing Orders provides a uniform baseline for workplace practices.