COMPARATIVE NOTE – LABOUR LAW CODES

On November 21, 2025, India implemented four new Labour Codes: Code on Wages, 2019 Industrial Relations Code, 2020 Code on Social Security, 2020 Occupational Safety, Health & Working Conditions (OSHWC) Code, 2020. These four codes now replace 29 older central labour laws and are in effect from November 21, 2025.

A comparative analysis of each code, along with the changes, is detailed hereinbelow:

1. CODE ON WAGES, 2019

Amalgamates, simplifies and rationalises the relevant provisions of the following four central labour enactments relating to wages, namely— (a) the Payment of Wages Act, 1936 (repealed); (b) the Minimum Wages Act, 1948 (repealed); (c) the Payment of Bonus Act, 1965 (repealed); and (d) the Equal Remuneration Act, 1976 (repealed).

The particulars and highlights of the code are as follows:

Wage Definition

• Provision under current laws – There were different definitions of wages across laws.
• Provision under the Code- Single definition of wages applicable for PF, bonus, gratuity, maternity benefit, employee state insurance etc. 

Action Point – Employers must ensure and consider this definition of wage for calculation of wages for the employees.

Applicability of Minimum Wage

• Provision under current laws – Minimum wages were applied to certain type of employments as categorized under the schedule of Minimum Wages Act, 1948. 
• Provision under the Code- Applies to all employees without any categorization specified. For the purpose of this code:

“Employee” includes any person who has been employed on wages to do any skilled, semi-skilled or unskilled, manual, operational, supervisory, managerial, administrative, technical or clerical work for hire or reward.

“Employer” means a person who employs, whether directly or through any person, or on his behalf or on behalf of any person, one or more employees in his establishment.

Action point – Employers to ensure all employees are paid minimum wages as per the notification of the government.

National Floor Wage   

• Provision under current laws – No minimum floor wages were set by the central government under Minimum Wages Act, 1948. The minimum wages were set by state governments in their sole discretion.
• Provision under the Code- Section 9 -The concept of floor wages has been introduced wherein the Central government will set a national minimum wage taking into account the minimum standard of living of workers, which will be standard for all states. The State government cannot fix wages below such amount prescribed by the central government.

Equality for all genders          

• Provision under current laws – Recognized equal pay for opposite genders i.e. male and female and prohibits discrimination on the basis of gender during recruitment for same or work of similar nature.
• Provision under the Code- Section 3- Recognizes equality amongst genders and prohibits discrimination on grounds of sex during recruitment for same or work of similar nature.

Wage period and time limit for payment 

• Provision under current laws- The time frame for payment of wages was calculated based on the number of employees in the establishment i.e. in any factory industrial or other establishment in which less than one thousand persons are employed, the wages were to be paid before the expiry of the seventh day. However, in other establishments the wages shall be paid before the expiry of the tenth day.
• Provision under the Code- Section 17- Under the new code, the employer shall fix the wage period for employees either as daily or weekly or fortnightly or monthly. The time limit for payment for employees falling under each such category has been provided for in the code i.e. (i) for employees engaged on daily basis – at the end of the shift; (ii) for employees engaged on weekly basis- on last working day of the week; (iii) Fortnightly basis – before expiry of the seventh day after end of the fortnight; (iv) monthly basis – before the expiry of the seventh day of the succeeding month.

Action Point – Employers to adjust payment timelines in accordance with the timelines mentioned in the act to avoid penalties.

Wages for Overtime Work    

• Provision under current laws- Employee works overtime i.e. in excess of the number of hours constituting a normal working day, employer to pay for every hour or part of an hour of excess hour at the rate fixed under this act or by state government.          
• Provision under the Code- Section 14- For every hour or part of hour of overtime, the employer shall pay him for every hour or for part of an hour so worked in excess, at the overtime rate which shall not be less than twice the normal rate of wages.

Action Point –Employers to ensure that their internal overtime policy provides for payment at the rate that is equal to or more than twice the normal rate of wage.

Payment after Termination and Resignation       

• Provision under current laws- The employer shall pay the due wages within 2 working days from the day his employment is terminated.   
• Provision under the Code- Section 17- Now this timeline will apply in cases of resignation as well. The State government can provide other time limit.
• Action point – The language of the provision is directive and does not provide carve out for timelines specified under specific contracts. Employers to ensure compliance unless state governments by notification provide for any other timeline.

Mode of Payment of Wages

• Provision under current laws- All wages shall be paid in current coin or currency notes or by cheque or by crediting the wages in the bank account of the employee.
• Provision under the Code- Section 15- Explicitly recognizes electronic payments as a mode of payment of wages.

Deductions from Wages        

• Provision under current laws- The total deductions which may be made under section 7 of payment of wages act 1936, in any wage-period from the wages of any employed person shall not exceed 75% in case of deduction made to cooperative societies and shall not exceed 50% of such wages in other case.
• Provision under the Code- Section 18 (sub-section 3) – The ceiling for cooperative societies has been removed, and it has been clarified that in no case deductions from the wages exceed 50% of such wages. As the definition of wages now clarifies wages to include basic pay, dearness allowance, and retaining allowance, the components other that these shall at all times be less or equal to 50% of the wages.

Action Point– Employers to restructure the salary packages of employees to in accordance with the new wages definition and ensure that other components of the salary does not cross the mark of 50% of the total CTC.

Disqualification for Bonus     

• Provision under current laws- An employee shall be disqualified from receiving bonus under this Code, if he is dismissed from service for— (a) fraud; or (b) riotous or violent behaviour while on the premises of the establishment; or (c) theft, misappropriation or sabotage of any property of the establishment.
• Provision under the Code- Section 29 – Conviction for sexual harassment has been added as the fourth ground.

Action Point – Employers to include disqualification for bonus on grounds of conviction for sexual harassment in relevant policies.

Claim Period      

• Provision under current laws- Under Payment of Wages Act, 1936 claims in relation to unlawful deductions could be filed within 12 months from the date of the deduction. However, application may be admitted after the said period of twelve months if the applicant satisfies the authority that he had sufficient cause for not making the application within such period.
• Provision under the Code- Section 45- The period of limitation for filing of claims by a worker has been enhanced to 3 years from the date on which such claim arises subject to sufficient cause being shown by the applicant for such delay.

Note – As per 61 of the wages code 2019, the provisions contained in the code have effect notwithstanding inconsistent contained in any other law time being in force or in the terms of any award, agreement, settlement or contract of service. Therefore, the code has an overriding effect.

2. CODE ON SOCIAL SECURITY, 2020 

Consolidates 9 acts particularly (i) Employee’s Compensation Act, 1923; (ii) Employees’ State Insurance Act, 1948; (iii) Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (iv) Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959 (v) Maternity Benefit Act, 1961 (vi) Payment of Gratuity Act, 1972 (vii) Cine-Workers Welfare Fund Act, 1981 (viii) Building and Other Construction Workers’ Welfare Cess Act, 1996 (ix) Unorganised Workers’ Social Security Act, 2008.

Status of the laws – All laws that have been consolidated are repealed. However, the Employees’ Provident Funds Scheme, 1952, the Employees’ Deposit Linked Insurance Scheme, 1976, the Employees’ Pension Scheme, 1995 and the Tribunal (Procedure) Rules, 1997 framed or made under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 and the rules, regulations and schemes made or framed under the Employees’ State Insurance Act, 1948 shall remain in force, to the extent they are not inconsistent with the provisions of this Code for a period of one year from the date of commencement of this Code.

Aggregator         

• Provision under current laws- Not defined.
• Provision under the Code- Section 2(2) – “aggregator” means a digital intermediary or a marketplace for a buyer or user of a service to connect with the seller or the service provider.

Gig–Workers      

• Provision under current laws- Not defined.
• Provision under the Code- Section 2(35) – “gig worker” means a person who performs work or participates in a work arrangement and earns from such activities outside of traditional employer-employee relationship.

Contract Labour

• Provision under current laws- Not defined.
• Provision under the Code- Section 2(19) – Contract labour” means a worker who is hired through a contractor to work for or in connection with the work of an establishment—even if the principal employer is not aware of the hiring. It also includes inter-State migrant workers supplied by a contractor. However, they are not included within the scope contract labour:

A worker who is a regular, permanent employee of the contractor (not a part-time worker), working for the contractor’s own business, and who receives regular pay increments, social security benefits (like PF, ESI, etc.), and other legally required welfare benefits.

Such a person is treated as the contractor’s own employee, not contract labour for the principal employer.

Employee

• Provision under current laws- Different under different acts.
• Provision under the Code- Section 2(26) – The definition of “employee” now includes contract workers.

Action Point– Employers to ensure that workers hired through contractors also receive the same treatment as their other employees.

Platform Work  

• Provision under current laws- Not defined.
• Provision under the Code- Section 2(60) – “platform worker” means a work arrangement outside of a traditional employer employee relationship in which organisations or individuals use an online platform to access other organisations or individuals to solve specific problems or to provide specific services or any such other activities which may be notified by the Central Government, in exchange for payment.

         A person engaged in platform work is a “platform worker”.

Fixed Term Employment                    

• Provision under current laws- Not defined.
• Provision under the Code- Section 2 (34) – “fixed term employment” means the engagement of an employee on the basis of a written contract of employment for a fixed period: Provided that— (a) his hours of work, wages, allowances and other benefits shall not be less than that of a permanent employee doing the same work or work of a similar nature; and (b) he shall be eligible for all benefits, under any law for the time being in force, available to a permanent employee proportionately according to the period of service rendered by him even if his period of employment does not extend to the required qualifying period of employment.

Action Point – Benefits of fixed term employee to be evaluated and made similar to those of permanent employees.

Registration of an Establishment under the Code         

• Provision under current laws- Different for different acts.            
• Provision under the Code– Section 3 – Mandatory registration under the code, however if establishment is already registered under any existing central labour law, it shall not be required to obtain registration again under the Code. Such existing registration shall be deemed to be registration for the purposes of the SS Code.

Action Point – Establishments not already registered to be registered under the new code.

Social Security Schemes for Gig and Platform Workers                  

• Provision under current laws- No specific schemes were implemented for gig workers and platform workers.     
• Provision under the Code– Section 114 – Scheme for matters pertaining to (a) life and disability cover; (b) accident insurance; (c) health and maternity benefits; (d) old age protection; (e) crèche; and (f) any other benefit as may be determined by the Central Government.

The scheme may be wholly or partly funded by central government or state government or both, or may be funded entirely by the contributions of the aggregators. For such purpose, the contributions shall be 1%-2% of the annual turnover of the aggregator subject to such contribution not exceeding 5% of the amount paid or payable by an aggregator to gig workers and platform workers.

Action Point – Awaiting rules and more information regarding setting up of the scheme.

ESIC and PF – Voluntary Applicability and Opt Out       

• Provision under current laws-

ESIC Applicability – It shall apply, in the first instance, to all factories (including factories belonging to the Government other than seasonal factories.

EPF Applicability – to every establishment which is a factory engaged in any industry specified in Schedule I and in which twenty or more persons are employed, and to any other establishment employing twenty or more persons.

• Provision under the Code–

Schedule 1 – Applicability threshold to ESIC- Every establishment in which ten or more persons are employed other than a seasonal factory. However mandatory if even one worker handles hazardous work.

EPF – Every establishment in which twenty or more employees are employed.

Section 1(5) and 1(7) – establishments where the employer and majority of employees agree that the provisions shall apply to such establishment can apply PF and ESI related chapters.

Similarly, Employer can apply to opt out of such voluntary application, if there is an agreement in this respect with majority of employees, complying with applicable conditions imposed by relevant authorities.

Gratuity for fixed term employees

• Provision under current laws- No provision           
• Provision under the Code– Section 53- Gratuity to be paid to fixed term employees irrespective of their length of service on pro-rata basis.

Action Point – Employers to gratuity benefits to fixed term employees and ensure change in establishment’s policy. 

3. OCCUPATIONAL SAFETY, HEALTH AND WORKING CONDITIONS CODE, 2020

Consolidates 13 acts including but not limited to the Factories Act, 1948; The Plantations Labour Act, 1951; The Mines Act, 1952; The Motor Transport Workers Act, 1961; The Contract Labour (Regulation and Abolition) Act, 1970; 9. The Sales Promotion Employees (Condition of Service) Act, 1976.

     Status of the consolidated laws – All laws that have been consolidated are repealed.

Definition of Establishment  

• Provision under current laws- Different under different laws.
• Provision under the Code– Section 2(v) – “establishment” means a place where any industry, trade, business, manufacturing or occupation is carried on in which ten or more workers are employed.

Definition of Workers

• Provision under current laws- Different under different laws.
• Provision under the Code– However, under the Contract Labour (Regulation and Abolition) Act 1970, the definition excluded such person, being employed in a supervisory capacity draws wages exceeding five hundred rupees per month.     Section (zl) – A person employed in any establishment to do any manual, unskilled, skilled, technical, operational, clerical, or supervisory work for hire or reward, whether the terms of employment be express or implied. The definition excludes the following:

(i)      Employed mainly in a managerial or administrative capacity;

(ii)     Employed in a supervisory capacity drawing wage exceeding INR 18,000 per month or an amount as may be notified by the Central Government from time to time.

Action Point – Applicability to extend to such workers who earn less than 18,000 if employed in a supervisory capacity.

Definition of Factory   

• Provision under current laws- Under Factories Act, 1948, “factory” included a precinct wherein a manufacturing process is carried on and which engages (i) ten or more workers in the preceding 12 months with the aid of power or (ii) twenty or more workers on any day of the preceding twelve months without the aid of power.         
• Provision under the Code– Section 2(w) – Under the new code, the thresholds have changed to 20 in case of a precinct wherein manufacturing process is carried with power and 40 in case of a precinct wherein manufacturing process is carried without power respectively.

Contract Labour obligations

• Provision under current laws- Applicable to establishments, contractors who employ 20 or more workman under the Contract Labour (Regulation and Abolition) Act, 1970.
• Provision under the Code– Section 45- Applicable to establishments which employ at least 50 contract labourers in the preceding 12 months. Furthermore, manpower supply contractors who employ at least 50 contract labour in the preceding 12 months will also be covered under relevant provisions.

Please note for the purpose of this code the definition of contract labour is same as that mentioned above in the social security code.

Working hours and other rights of workers        

• Provision under current laws- Under the Factories Act, 1948:

a)   No adult worker shall be required or allowed to work in a factory for more than 9 hours in a day.

b)   No adult worker shall be required or allowed to work in a factory on the first day of the week.

c)   Extra wages for overtime at twice the rate of wages, no consent requirements.

• Provision under the Code–

a)    Section 25- Maximum 8 working hours in a day

b)   Section 26- No worker to be allowed to work more than six days a week.

c)    Section 27- Extra wages for overtime at twice the rate of wages, to be calculated on weekly or daily basis and subject to consent of the worker.

Annual Leave with wages      

• Provision under current laws- Eligibility – Worker who has worked for 240 days or more in a calendar year.

One day for every twenty days of work performed by him during the previous calendar year.

• Provision under the Code– Section 32- Eligibility – Worker who has worked for 180 days or more in a calendar year same as before.

Action Point – Leave policies of company to be revised.

Annual leave encashment     

• Provision under current laws- Leave encashment only in cases of dismissal from service or quits his employment or is superannuated or dies while in service, during the course of the calendar year.     
• Provision under the Code– Section 32 (ix) – In addition to avail leave encashment in case of dismissal, resignation or death, workers may request leave encashment at the end of each calendar year for any accrued leave exceeding the 30 days carry forward limit.

Night shifts for woman          

• Provision under current laws- Factories Act, 1948 prohibited engagement of women employees between 7 pm and 6 am.
• Provision under the Code– Section 43- Women can now be employed, subject to their consent before 6 a.m. and beyond 7 p.m. subject to such conditions relating to safety, holidays and working hours or any other condition to be observed by the employer as may be prescribed by the appropriate Government.

Appointment Letter    

• Provision under current laws- No provision.
• Provision under the Code– Section 6- Issue a letter of appointment to every employee on his appointment in the establishment, with such information and in such form as may be prescribed by the appropriate Government and where an employee has not been issued such appointment letter on or before the commencement of this Code, he shall, within three months of such commencement, be issued such appointment letter. 

Safety officers   

• Provision under current laws- As per the factories Act, 1948, Safety officers were to be appointed in every factory, — wherein one thousand or more workers are ordinarily employed, or (ii) wherein, in the opinion of the State Government, any manufacturing process or operation is carried on, which process or operation involves any risk of bodily injury, poisoning or disease, or any other hazard to health, to the persons employed in the factory.    
• Provision under the Code– Section 22 – The employer to appoint a safety officer in (a) factory wherein five hundred workers or more; or (b) factory carrying on hazardous process wherein two hundred fifty workers or more; or (c) building or other construction work wherein two hundred fifty workers or more shall appoint safety officers.

4. INDUSTRIAL RELATIONS CODE, 2020

Consolidates (i) Industrial Disputes Act, 1947 (ii) Industrial Employment (Standing Orders) Act, 1946 and (iii) Trade Unions Act, 1926.

Status of the consolidated laws – All three are repealed.

Grievance redressal committee

• Provision under current laws- Every industrial establishment employing twenty or more workmen shall have one or more Grievance Redressal Committee for the resolution of disputes arising out of individual grievances. However, this section was not applicable to the workmen for whom there is an established Grievance Redressal Mechanism in the establishment concerned.
• Provision under the Code– Section 4- Threshold remains the same however it has become mandatory notwithstanding that Grievance Redressal Mechanism is already established.

Negotiating council for Trade Unions        

• Provision under current laws- No provision.          
• Provision under the Code– Section 14 – In case of Industrial establishment having a registered trade union, there shall be negotiating union or council for negotiation purposes, in the event there is only one registered trade union, such union will be the negotiating union. However, in case there are multiple registered trade unions, the code provides for the manner in which the negotiating union shall be recognized.

Standing Orders and concept of deemed certificate    

• Provision under current laws- Applicable to establishments with 100 or more employees.        
• Provision under the Code– Section 29 and 30 – Applicable to every industrial establishment having 300 or more employees. Such establishment must draft their Standing Orders within 6 months from the commencement of the code however if such an establishment simply adopts the model standing order issued by the central government, in which case they will be treated as already certified.

Worker’s Reskilling Fund       

• Provision under current laws- No provision.
• Provision under the Code– Section 83 – Fund to be set up by appropriate government and the fund shall consist of the contribution of the employer of an industrial establishment an amount equal to fifteen days wages last drawn by the worker immediately before the retrenchment.

The fund shall be utilized by crediting fifteen days wages last drawn by the worker to his account who is retrenched, within forty-five days of such retrenchment, in such manner as may be prescribed.