The Ministry of Labour and Employment has pre-published draft Rules under all four Labour Codes, marking a major step towards the full implementation of India’s labour law reforms that came into force in November 2025. The draft Rules cover the Code on Wages, the Code on Social Security, the Industrial Relations Code, and the Code on Occupational Safety, Health and Working Conditions. The ministry has invited feedback from stakeholders within a 30 to 45-day window, after which the final Rules will be notified. These Rules are meant to operationalise the broader legal framework by detailing how wages, working conditions, social security, safety norms and dispute resolution mechanisms will function in practice.
Under the draft Code on Wages Rules, the government has outlined how minimum wages will be calculated and revised. Wages will be fixed on a daily basis and then converted into hourly or monthly rates using a uniform formula. The calculation considers the needs of a standard working-class family, including food, housing, clothing, fuel, electricity, education and healthcare. A national floor wage will be fixed by the Centre, below which no state can set its minimum wage, though states may prescribe higher rates depending on local conditions. The Rules also clarify how allowances are to be treated when they exceed 50 per cent of total pay and specify which components, such as bonuses and reimbursements, are excluded from wage calculations.
The draft Rules reaffirm the 48-hour weekly working limit and an eight-hour workday, while clearly defining overtime wages, rest days and substituted holidays. Special provisions have been included for night shifts, especially for sectors that operate round the clock. These rules also permit women to work night shifts, subject to consent and mandatory safety measures, reflecting a more inclusive approach to workforce participation.
Clear timelines for wage payments and strict limits on deductions have also been laid down. Total deductions in a wage cycle cannot exceed 50 per cent of an employee’s wages, and any excess must be carried forward. Employers are required to follow due process before imposing fines or deductions, including giving workers an opportunity to be heard. All such deductions must be reported to the designated Inspector-cum-Facilitator within prescribed timelines.
The draft Rules extend coverage to informal and younger workers by removing the earlier distinction between scheduled and non-scheduled employment. All employees, including contract and fixed-term workers, are now covered under the wage framework. Workers aged 16 and above are entitled to wage protection, and unorganised workers can register through Aadhaar-based systems to access social security benefits across states. This aims to bring greater uniformity and protection to India’s large informal workforce.
Fixed-term employees have been granted parity with permanent workers in terms of wages and benefits, including eligibility for gratuity after one year of service. This marks a significant shift from earlier norms and is expected to improve job security while reducing excessive reliance on informal contractual arrangements.
The draft Rules also lay down a structured mechanism for dispute resolution, including filing claims for delayed wages, unpaid overtime or denial of benefits. Timelines have been specified for appeals and recovery, and the Inspector-cum-Facilitator model emphasises compliance and guidance rather than punitive enforcement.
Provisions relating to equal pay have been strengthened by integrating earlier rules under the now-repealed Equal Remuneration Act. Employers will be required to maintain detailed wage records, including gender-wise data, making discrimination easier to detect and address. The expanded definition of family, including parents-in-law for women workers, also has implications for wage-linked and social security benefits, reflecting a more gender-sensitive approach.
The government has said that stakeholder feedback will be reviewed before finalising the Rules. Until then, existing labour rules will continue to apply. Once notified, the new framework is expected to bring clarity, consistency and greater protection for workers while providing businesses with a uniform compliance structure ahead of the next financial year.
