The Indian government has officially notified four comprehensive labour codes that promise to transform the working landscape for millions of employees and employers across the country. These long-awaited reforms aim to establish a uniform structure for wages, bonuses, and employment-related matters while embedding the principle of equal remuneration for equal work.
Major Employee Benefits Under New Labour Codes
Timely payment of wages stands out as a crucial improvement for workers. Employers must now pay daily wage workers at the end of their shift, weekly workers before their weekly holiday, fortnightly workers within two days of the fortnight ending, and monthly workers within seven days of the next month. When employment terminates, payment must be made within two working days.
The codes introduce equal remuneration across genders, ensuring no discrimination in wages for the same work or work of similar nature. This provision extends beyond wages to cover recruitment and employment conditions, promoting comprehensive workplace equality.
Wage Structure and Working Hours
The definition of wages now includes basic pay, dearness allowance, and retaining allowance, while excluding bonus, house accommodation value, HRA, travel allowance, and gratuity. A significant change limits deductions to 50% of total wages, meaning the wage component must constitute at least half of the total pay. This increases the base for social security contributions like PF and gratuity but may reduce take-home salaries.
Working hours show flexibility with daily limits between 8-12 hours and a weekly cap of 48 hours. The government may permit four-day work weeks provided the 48-hour weekly limit is maintained. Overtime work will command double the normal wage rate, a substantial improvement for workers putting in extra hours.
Expanded Social Security Coverage
Perhaps the most groundbreaking change brings gig and platform workers under social security protection for the first time. Schemes covering life insurance, disability, accident insurance, health, maternity benefits, and crèche facilities will be notified, with aggregators contributing 1-2% of their annual turnover toward these benefits.
The Employees' Provident Fund Organisation (EPFO) coverage expands to all establishments with 20 or more employees, regardless of industry type, removing previous restrictions that primarily covered manufacturing sectors.
Fixed-term employees receive parity with permanent workers in hours of work, wages, and allowances. Gratuity becomes accessible after just one year of service instead of the previous five-year requirement.
Health and Safety Provisions
Every employee becomes entitled to free annual health check-ups, enabling early disease detection and reducing medical costs while promoting workforce wellness and productivity.
Women gain the right to work night shifts (before 6 AM and after 7 PM) with proper safety measures and consent. Establishments must form safety committees with equal representation from employers and workers in factories with 500+ workers, construction sites with 250+ workers, and mines with 100+ workers.
The introduction of a National Floor Wage establishes a baseline for wages across the country, preventing states from setting minimum wages below this threshold. Minimum wages will apply to all employees regardless of sector or wage ceiling, offering uniform legal protection that particularly benefits casual workers, daily wagers, and migrant labourers.
Additional requirements include issuing wage slips before payment and appointment letters to all employees, providing documentary proof of employment terms and compensation details.
These comprehensive labour reforms represent the most significant overhaul of India's labour laws in decades, potentially affecting organized and unorganized sector workers nationwide while creating a more standardized framework for employers operating across different states.
