Four Labour Codes 2020
Labour Laws · चार श्रम संहिताएं 2020 · 18 facts
Labour codes consolidation: 4 Labour Codes passed in 2019-2020 to consolidate 44 central labour laws; aim to simplify compliance and promote ease of doing business.
Code on Wages 2019: Merges 4 laws — Minimum Wages Act 1948, Payment of Wages Act 1936, Equal Remuneration Act 1976, Payment of Bonus Act 1965.
Industrial Relations Code 2020: Merges 3 laws — Trade Unions Act 1926, Industrial Employment (Standing Orders) Act 1946, Industrial Disputes Act 1947.
Social Security Code 2020: Merges 9 laws — EPF Act, ESI Act, Gratuity Act, Maternity Benefit Act, Building & Construction Workers Act, ESIC Act, and others.
Occupational Safety, Health and Working Conditions Code (OSHWC) 2020: Merges 13 laws including Factories Act 1948, Mines Act 1952, Dock Workers Act, Contract Labour Act.
Labour codes implementation status: All 4 codes passed by Parliament but NOT yet enforced in most states as of 2024; states need to frame their own rules first.
Fixed Term Employment: Industrial Relations Code introduces fixed-term employment across all sectors; such workers entitled to all benefits including gratuity pro-rated.
IR Code — Retrenchment threshold raised: Only establishments with 300+ workers need Central Government approval for retrenchment/closure (was 100 earlier).
Universal Definition of 'Worker': Labour codes extend coverage to gig workers and platform workers under Social Security Code for the first time.
Minimum floor wage (Code on Wages): National Floor Wage notified by Central Government; states cannot set minimum wages below this floor.
Code on Wages — equal pay: Mandates equal remuneration for men and women for same/similar work; strengthens Equal Remuneration Act provisions.
OSHWC Code — working hours: Maximum 8 hours/day and 48 hours/week; overtime at double rate; rest intervals and weekly off mandatory.
Social Security Code — gig workers: First law to define and provide social security for gig workers; aggregators (Ola, Swiggy, Zomato) to contribute to social security fund.
Criticism of Labour Codes: Trade unions oppose threshold increase for retrenchment (300 vs 100); fear reduced worker protection; implementation delayed.
Annual returns simplification: Labour codes reduce multiple annual returns to single return covering all labour law compliances — reduces administrative burden.
IR Code — recognition of trade unions: Only most representative union gets negotiating rights; 'negotiating union' concept introduced; resolves problem of multiple unions.
Labour codes and concurrent list: Labour is on the Concurrent List (both Centre and States can legislate); all 4 codes are Central laws; states frame their own rules under them.
Professional Tax: State-level tax on employment (different from income tax); UP to Rs 2500/year; levied by states under 7th Schedule; not covered by Labour Codes.