Labour Codes Set For April 1 Implementation To Match Financial Calendar
The Ministry of Labour and Employment is actively considering making the four Labour Codes effective from April 1 this year. This strategic move aims to align the rollout with companies' financial year cycles. Officials believe this timing will help businesses manage the financial impact more smoothly.
Financial Year Alignment Eases Implementation Burden
Implementing the Codes at the start of the financial year provides companies with a clear beginning point for compliance. It allows them to incorporate changes into their annual planning and budgeting processes. The current timeline would place implementation in the closing months of the financial year, creating operational challenges.
According to officials familiar with the discussions, April 1 represents a more practical date for nationwide rollout. The government has received multiple suggestions from stakeholders to defer operationalisation to the next financial year. February and March fall in the last quarter, making implementation during this period particularly difficult for accounting and compliance teams.
Four Labour Codes Await Final Rules
The ministry notified draft Rules for four crucial Labour Codes on December 31 last year. These include the Code on Wages, the Code on Social Security, the Industrial Relations Code, and the Code on Occupational Safety, Health and Working Conditions. The government invited comments from stakeholders within 30 to 45 days of this notification.
While the four Labour Codes received notification on November 21, they will only take effect after the final Rules are issued. The draft Rules are expected to be finalised by mid-February according to current timelines. Once the final Rules are officially notified, the Codes become operational unless the government announces a separate later date.
Potential Relaxation For Gig Workers
The ministry is also considering easing eligibility norms for gig and platform workers under the Code on Social Security, 2020. Current requirements mandate 90 days of work with a single aggregator, or 120 days across multiple platforms in a financial year. Officials indicate these thresholds could be reduced to allow more gig workers to qualify for benefits.
This relaxation would enable broader access to social security protections for India's growing gig workforce. Benefits could include health insurance, life insurance, and accident insurance coverage. The move recognizes the flexible nature of gig work and aims to extend social security to more workers in this sector.
SPREE Scheme Shows Strong Registration Numbers
Separately, the ministry highlighted significant progress under the Scheme to Promote Registration of Employers and Employees. Known as SPREE, this initiative aims to expand formal employment and social security coverage across the country. Since its rollout last year, the scheme has achieved remarkable registration numbers.
The SPREE scheme has led to the registration of 1.03 crore new employees under the Employees' State Insurance Corporation. This represents substantial growth in formal sector coverage. As of January 11, approximately 1.17 lakh employers had registered along with these 1.03 crore employees.
SPREE operates from July 1, 2025 to January 31, 2026. It provides a one-time opportunity for employers and employees previously excluded from ESI coverage to register without facing retrospective compliance issues or penalties. This window approach encourages broader participation in formal social security systems.
EPFO Reforms Expand Withdrawal Options
In related developments, the ministry has introduced several reforms under the Employees' Provident Fund Organisation. One significant change allows subscribers to withdraw up to 75% of their provident fund corpus while maintaining a minimum balance of 25% with the retirement fund body. This provides greater financial flexibility for subscribers during emergencies or special circumstances.
The combined effect of these measures represents a comprehensive approach to labour reform. The government appears focused on balancing employer compliance needs with worker protection enhancements. The April 1 implementation date, if finalized, would mark a significant milestone in India's labour law modernization efforts.
