Indian Labour Codes (2019–2020)
One-page summary of the 4 Labour Codes (29 Acts → 4 Codes)
Quick Index (Click to Jump)
What is a “Labour Code”?
- Meaning: A consolidated legal framework that merges multiple labour laws into fewer, structured laws.
- India’s Reform: About 29 Central Labour Acts were consolidated into 4 Labour Codes (2019–2020).
- Goal: Simplified compliance + modern industrial relations + stronger worker protection + improved social security coverage.
Educational Notice: This resource is for educational purposes only and does not constitute legal advice.
1) Code on Wages, 2019
What it covers (Summary)
- Minimum Wages: Fixation and payment of minimum wages.
- Payment of Wages: Timely salary payment and lawful deductions.
- Bonus: Statutory bonus framework.
- Equal Remuneration: Equal wages for same/similar work (no gender discrimination).
Practical Compliance Points (CA View)
- Wage Structure: Salary break-up matters due to “wages” definition and wage-linked compliances.
- Timelines: Salary payment due dates + final settlement on termination.
- Registers/Records: Maintain wage slips, wage registers, deduction proof, attendance.
Example
If a state minimum wage for a category is ₹12,000 and employer pays ₹10,000, it can trigger wage short-payment liability and penalties.
2) Industrial Relations Code, 2020
What it covers (Summary)
- Trade Unions: Registration and recognition aspects.
- Standing Orders: Service conditions / employment rules (threshold-based).
- Industrial Disputes: Layoff, retrenchment, closure procedures, dispute resolution.
- Strikes/Lockouts: Notice requirements and regulation.
Practical Compliance Points (CA View)
- Headcount Thresholds: Many duties depend on number of workers.
- Retrenchment/Layoff: Compensation and approvals (where applicable) must be checked.
- HR Documentation: Policies, appointment letters, disciplinary procedures must be consistent.
Example
If a company plans retrenchment, the employer must ensure proper notice + compensation and follow any approval/threshold requirements, otherwise it becomes a major litigation risk.
3) OSH & Working Conditions Code, 2020
What it covers (Summary)
- Workplace Safety: Safety standards, inspections, welfare facilities.
- Health: Occupational health, medical examinations (where prescribed).
- Working Conditions: Hours, leave, conditions across establishments.
- Contract & Migrant Labour: Regulation and welfare aspects.
Practical Compliance Points (CA View)
- Registrations/Licensing: Confirm establishment registrations & contractor licensing.
- Safety Records: Safety training, incident logs, protective equipment compliance.
- Women Night Shifts: Ensure safety safeguards if applicable (transport, security, consent).
Example
A factory employing contract workers should verify the contractor’s licensing and maintain worker welfare/safety records—non-compliance can attract penalties and shutdown risk.
4) Code on Social Security, 2020
What it covers (Summary)
- Provident Fund (PF): Retirement benefits framework (where applicable).
- ESI: Health insurance benefits (where applicable).
- Gratuity / Maternity / Other Benefits: Consolidated social security approach.
- Gig/Platform Workers: Framework for social security inclusion (rule-based rollout).
Practical Compliance Points (CA View)
- Monthly Deposits: PF/ESI contributions + return filings + reconciliations.
- Payroll Mapping: Correct wage components mapped to contribution base.
- Gratuity Provisioning: Liability recognition and policy compliance.
Example
If PF wages are misclassified in payroll, it may lead to short contribution and later demand with interest/penalties during inspection or audit.
CA Practice — Quick Monthly Checklist (Snapshot)
| Area | Checkpoints | Frequency |
|---|---|---|
| Payroll | Minimum wage mapping, salary timelines, payslips, lawful deductions | Monthly |
| PF/ESI | Contribution calculation, deposit, returns, reconciliation | Monthly |
| HR/IR | Headcount thresholds, policies, retrenchment/layoff documentation | Quarterly / Event-based |
| Safety/OSH | Licenses, safety training logs, contractor compliance | Periodic / Inspection-based |
| Annual | Bonus computation, labour audit file, policy updates | Yearly |
Tip: Maintain a “Labour Compliance File” client-wise: registrations, wage sheets, PF/ESI challans, returns, inspection notices, and policy documents—this single habit saves cases.