Background
- The Government of India or GoI implemented the four Labour Codes through a notification issued on 21 November 2025.
- On 30 December 2025, the GoI issued draft Central Rules under the four Labour Codes, namely:
- The Code on Wages (Central) Rules, 2025 (“CoW Central Rules”)
- The Code on Social Security (Central) Rules, 2025 (“CoSS Central Rules”)
- The Occupational Safety, Health and Working Conditions (Central) Rules, 2025 (“OSHW Code Central Rules”)
- The Industrial Relations (Central) Rules, 2025 (“IR Code Central Rules”)
These draft rules have been issued for public consultation, inviting objections and suggestions within 30 days for the IR Code Central Rules and 45 days for the Central Rules on other three Codes.
Key Highlights
I. Wages for payment of gratuity
- It is clarified that the exclusion from wages shall include any payment payable on an annual basis, which is linked to performance or productivity of an employee or of the establishment in which he or she is employed and is not part of the remuneration payable under the terms of employment.
- The following shall also not form part of wage:
- Reimbursement of medical expenses
- Stock options or cash equivalents of stock awards
- Crèche allowance
- Telephone and internet reimbursements
- Value of meal vouchers
II. Methodology and norms for fixation of minimum wages
- Minimum wage is to be fixed considering a standard working-class family (employee, spouse, two children) equal to three adult consumption units.
- The rate is determined based on the skill category (unskilled, semi-skilled, skilled, highly skilled) and the nature of work.
- The calculation also considers geographical location, industry type, and working conditions, providing that wages reflect local living costs and sector-specific requirements.
III. Working hours and weekly rest under CoW Central Rules
- The number of hours constituting a normal working day (including intervals) shall be as per general or special orders issued from time to time.
- The work schedule must be designed so that the spread-over period, including intervals, does not exceed the prescribed limit under such orders.
- Every employee is entitled to one rest day per week, which is ordinarily Sunday in a six-day week; in a five-day week, it generally includes Saturday and Sunday.
- Employers may fix any other day as the rest day, but the remaining days of the week shall be paid working days for employee.
IV. Annual free health check-up for employees
- Employers in factories, docks, mines, and construction sites must arrange free annual medical check-ups for employees aged 40 and above within 120 days of the start of the calendar year.
- They may also utilise ESIC facilities for these examinations as per CoSS Central Rules.
V. Manner of fixing floor wage and revision
- The Central Government consults the Central Advisory Board (the “Board”) and considers minimum living standards such as food, clothing, housing, and other essential factors for a standard working-class family before fixing the floor wage.
- After obtaining advice from the Board, the Central Government shares it with State Governments for their views, which are considered before finalising the floor wage.
- The floor wage is ordinarily reviewed and revised at intervals not exceeding five years to keep it aligned with living standards.
VI. Gratuity to fixed-term employees
- Fixed-term employees are eligible for gratuity if they render service under the contract for at least one year. Any subsequent period of service in excess of six months or more, but less than one year, shall be rounded off to one additional year.
VII. Inter-state migrant workers are entitled to a journey allowance for round-trip travel to their home state once every 12 months, after completing 180 days of work.
VIII. Overtime wage
- Daily working hours of workers, intervals, spread overs to be notified separately.
- Workers who work beyond 48 hours a week are entitled to overtime wages at twice their regular rate, payable at the end of each wage period.
- For overtime calculation, 15–30 minutes is treated as 30 minutes, and more than 30 minutes as one hour. For monthly-paid workers, daily wages equal 1/26th of the monthly wage; for others, it is their actual daily earnings.
- No worker shall be allowed to work overtime exceeding 144 hours in any quarter of a year.
IX. Crèche facility
- Every establishment with 50 or more employees must provide and maintain a crèche for children under six years within one kilometre of the establishment.
- If there is no negotiating union or council, the majority of employees can agree with the employer to provide a crèche facility for children under six or pay a monthly crèche allowance of at least INR 500 per child or an amount notified by the Central Government, applicable for up to two children.
X. Issuance of appointment letter
- Mandatory issuance of appointment letters to employees who have not received appointment letters within three months from the date of commencement of OSHW Central Rules.
- The format and particulars to be included in appointment letter has been prescribed.
XI. Mandatory duties of an employer in case of women employees working night shifts
- Duties include obtaining prior consent from the employee, providing safe transportation facilities, and supporting essential amenities such as well-lit washrooms and drinking water facilities.
- The workplace, including specified areas, should have suitable provisions for CCTV surveillance, and surveillance should also be provided on the way to these facilities.
- No woman shall be employed in violation of the maternity benefit provisions laid down under the Social Security Code, 2020.
XII. Contract labour
- A contract worker regularly employed by the contractor under mutually agreed employment conditions must receive an annual wage increment of at least two percent.
- If contract labour works at the principal employer’s premises, the principal employer must provide basic facilities or amenities such as toilet, washroom, drinking water, bathing facilities if required, changing room, first aid box, canteen and crèche, while all other facilities and entitlements are the contractor’s responsibility.
- Contractors can obtain a single license for engaging contract workers in more than one State or across the whole of India, streamlining compliance and reducing the need for multiple state-specific licenses.
XIII. Grievance Redressal Committee
- Mandatory for every Industrial establishment employing 20 or more workers as per IR Code Central Rules to set up a grievance redressal committee to address individual employee grievances, providing equal representation from both employers and workers, not exceeding 10 members.
- Women representatives must be included in the grievance committee in proportion to their workforce share.
- As per OSHW Code Central Rules, contract labour grievances related to health, working conditions, or wages must be addressed by the principal employer, either directly or through a committee, and issues remaining unresolved within one month must be escalated to the Inspector-cum-Facilitator.
XIV. Constitution of works committee
- Mandatory for every Industrial establishment with 100 or more workers to constitute a works committee to promote employer-worker co-operation.
- The total number of members of the committee shall not exceed twenty.
- The committee will include representatives of both employers and workers, with worker representatives not less than those of employers.
XV. Standing Orders
- The Model Standing Orders for the purposes of the Code in respect of industrial establishments in mine sector, manufacturing sector and service sector shall be those set out in Schedule-A, B and C of IR Code Central Rules.
- Employers can adopt the Model Standing Orders provided by the Central Government, which once adopted, these orders apply to all units of the establishment across the country.
- If the certifying officer notices that the establishment adopting model standing orders also has other activities, he or she can ask the employer within 30 days to add relevant provisions and submit a compliance report. If no directions are given within 30 days, the model standing orders are automatically considered certified.
XVI. Worker re-skilling Fund
- Employers must transfer an amount equal to 15 days of last drawn wages for each retrenched worker to a designated account maintained by Labour Commissioner within 10 days of retrenchment, along with worker details and bank accounts.
- The collected fund will then be electronically transferred to the retrenched workers’ bank accounts within 45 days to help them with re-skilling.
XVII. Re-employment of retrenched workers
- Employers must give preference to retrenched workers (within one year of retrenchment) for re-employment based on seniority, provided they are Indian citizens and have expressed willingness.
- Employers must display vacancy details on the noticeboard at least 15 days before filling positions and inform eligible retrenched workers individually via registered post, speed post, or email.
