Four Labour Codes in India: Wages, Industrial Relations, Social Security and OSH Explained

India’s labour law system previously consisted of more than 29 central laws, creating regulatory complexity, a compliance burden, and fragmented worker protection. To address this, the Government of India introduced the Four Labour Codes, namely Code on Wages 2019, Industrial Relations Code 2020, Code on Social Security 2020 and Occupational Safet,y Health and Working Conditions Code 2020.

These reforms aim to balance ease of doing business, labour market flexibility and expansion of worker welfare. The topic is important for UPSC GS Paper 3 under Economy, Inclusive Growth and Employment.

Background: Why Labour Law Reforms Were Needed

Structural Issues in Earlier Labour Laws

• Multiple and overlapping definitions of wages and workers

• Limited social security coverage, especially in the informal sector

• Complex compliance and inspection systems

• Rigid labour exit norms affecting industrial growth

• Lack of legal recognition for gig and platform workers

Economic Context

• Growth of the gig economy and platform-based employment

• Need to boost manufacturing and formal job creation

• Need to improve the global competitiveness and investment climate

Overview of the Four Labour Codes

Code on Wages 2019 focuses on wage standardisationThe 
Industrial Relations Code 2020 focuses on employer-employee relations
Social Security Code 2020 focuses on social protection expansion
OSH Code 2020 focuses on workplace safety and welfare

Code on Wages 2019

Key Features

• Universal minimum wage coverage for all workers

• Introduction of the National Floor Wage System

• Single definition of wages

• Equal pay for equal work for men and women

• Mandatory digital or physical wage slips

Significance

• Reduces wage-related disputes and litigation

• Improves income security for informal workers

• Promotes wage transparency and accountability

Concerns

• Debate over the floor wage calculation method

• Concerns regarding state-level wage flexibility

Industrial Relations Code 2020

Key Features

• Layoff approval threshold increased from 100 to 300 workers

• Fixed-term employment was introduced

• Expanded strike notice requirements

• Broader definition of worker

Significance

• Encourages industrial expansion and hiring

• Reduces fear of rigid labour exit rules

• Aligns with global labour market trends

Criticism

• Trade unions argue it reduces job security

• Strike restrictions seen as weakening labour rights

Code on Social Security 2020

Key Features

• Legal recognition of gig and platform workers

• Aadhaar-linked national social security database

• Expansion of EPFO and ESIC coverage

• Mandatory coverage for hazardous occupations

Significance

• A major step towards universal social security

• Addresses the future of work and digital economy challenges

Concerns

• The funding model for gig worker welfare is unclear

• Implementation depends on scheme level rules

Occupational Safety, Health, and Working Conditions Code 2020

Key Features

• Safety standards extended to establishments with more than 10 workers

• Free annual health check-ups for workers above 40 years

• Women are allowed to work in night shifts with safety safeguards

• Expanded definition of interstate migrant workers

Significance

• Improves workplace dignity and safety

• Supports gender inclusive workforce participation

• Improves migrant worker protection

Criticism

• Enforcement capacity challenges

• Compliance burden on small enterprises

Reform Versus Criticism: Analytical Perspective

Reforms aim to simplify compliance, increase formalisation, expand social security and improve labour flexibility.
Criticism focuses on risk of contractualisation, reduced trade union strength, implementation gaps and funding challenges.

Implementation Challenges

• Labour is in the Concurrent List, requiring Centre-State coordination

• Delay in state-level rule notification

• Digital compliance challenges for small enterprises

• Low awareness among workers

Way Forward

• Strengthen tripartite consultation between government industry and labour unions

• Ensure clarity in social security funding for gig workers

• Use digital labour registries for welfare delivery

• Improve labour inspection transparency

• Build administrative capacity at state level

Conclusion

The Four Labour Codes represent one of India’s most important labour market reforms after economic liberalisation. While they aim to modernise labour regulation and promote investment and employment, their success depends on balanced implementation, cooperative federalism and protection of worker welfare along with economic growth.

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