It's a new day for labour

Four consolidated codes advance equal pay for women, gig worker protection, gratuity after a year, health checks

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The Centre on Friday notified four new labour codes that extend basic social security and minimum wage guarantees to over 400 million workers across the formal and informal sectors.

Further, the codes include provisions such as equal pay for women, gratuity for fixed-term employees after one year, free annual health checkups for workers above 40 years, double wages for overtime, and full health security for workers in hazardous sectors.

The codes replace a labyrinth of 29 fragmented laws, a statement by the labour ministry said, calling it a significant effort to modernise archaic laws. Some of these laws date back to the colonial and immediate postIn- dependence era (1930s-1950s), in a world that was “fundamentally different”, the statement added.

The new framework, effective immediately, consolidates India’s employment statutes into 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 (OSHWO) Code, 2020.

While the labour ministry said it will consult stakeholders in framing rules under the Code, a senior government official told Mint that draft rules will be issued within a week, opened for 45 days of comments, and finalised in the next 45. Provisions needing no rules take effect immediately; others will be notified after consultations.

A key feature across all four codes is the revised definition of ‘wages’, which will now include basic pay, dearness allowance and retaining allowance, and employers must ensure that at least 50% of total remuneration qualifies as wages.

Earlier, employers structured salaries so that basic pay plus DA formed a small portion of total compensation, with other large parts excluded from benefits like PF and gratuity.