By Bhaskar Subramanian, Partner, S&S Co. Advocates & Solicitors and Chandrayee Roy, Associate, S&S Co. Advocates & Solicitors
Published 24 October 2026 · Law stated as on 21 October 2026 · Informational content, not legal advice: see our disclaimer
The Code on Wages, the Industrial Relations Code, the Occupational Safety, Health and Working Conditions Code and the Code on Social Security came into force on 21 November 2025, replacing twenty-nine central labour statutes. Central rules followed by May 2026, but the Codes depend on labour being a concurrent subject, which means each state must write and notify its own rules before the new regime actually governs a given workplace. A year in, the picture is uneven: some provisions are settled law, several carry two conflicting readings in the commentary, and the national floor wage that was meant to anchor the whole wage structure has still not been notified.
Key points
- All four codes are formally in force from 21 November 2025, but the Industrial Relations Code was notified in full while the Wage Code and the Social Security Code were notified only in part, so checking which specific section is live still matters.
- The threshold for certified standing orders and for prior government permission before lay-off, retrenchment or closure rose from 100 to 300 workers; state governments may raise the lay-off, retrenchment and closure permission threshold further, but neither it nor the standing-orders threshold can be lowered, and most states have not changed either one.
- The national floor wage under Section 9 of the Code on Wages, meant to set a baseline below which no state minimum wage can fall, had still not been notified as of this article, so state minimum wages continue largely unchanged.
- Fixed-term employees now qualify for gratuity after one year of service rather than five, on the government's own FAQ guidance, though the calculation method for a partial year remains contested among commentators.
- Gig and platform aggregators owe a social security contribution of one to two percent of annual turnover under Section 114 of the Code on Social Security, but the actual rate and start date await a separate notification, even as registration duties for individual gig workers already apply.
- Most states have not yet notified their own rules under any of the four codes, and the Labour Secretary's own target of full state coverage by 31 October 2026 depends on notifications that were still arriving at the time of writing.
From twenty-nine statutes to four codes: what actually happened on 21 November 2025
Parliament passed the Code on Wages in 2019 and the other three codes, the Industrial Relations Code, the Occupational Safety, Health and Working Conditions Code, and the Code on Social Security, in 2020. For five years they sat on the statute book without a commencement date, partly because the government wanted states to have their rules ready before switching on a regime that depends on state-level machinery to function. That changed on 21 November 2025, when the Ministry of Labour and Employment issued four separate notifications, S.O. 5319(E) for the Social Security Code, S.O. 5320(E) for the Industrial Relations Code, S.O. 5321(E) for the Occupational Safety Code, and S.O. 5322(E) for the Wage Code, bringing each into force to the extent stated in the notification.
The extent mattered more than the headline. The Industrial Relations Code was brought into force in full. The Wage Code and the Social Security Code, by contrast, were notified only in part, meaning some of their provisions sat alongside the older laws they were meant to replace rather than displacing them outright on day one. Anyone advising a client in late 2025 or through 2026 on a specific wage or social security question needed to check which section of which code was actually live, not simply assume the whole code applied because the headline notification had issued.
Central rules followed considerably later, with most reported as notified on 8 May 2026 and the rules under the Occupational Safety Code following a day after, on 9 May 2026. Draft versions of these rules had been published for comment back in December 2025, so the gap between draft and final rules ran to roughly five months. For an employer, the rules matter at least as much as the codes themselves, since the codes set out the framework while the rules fix the actual numbers, forms and procedures that compliance depends on.
None of this disturbed the twenty-nine older laws overnight. Each code carries a savings clause preserving existing rules, standards, schemes and notifications issued under the law it replaces until a corresponding provision is notified under the new code, so an employer's existing registrations and licences generally remained valid through the transition rather than lapsing on 21 November 2025.
Wages: a Code in force, a floor wage still missing
The Code on Wages consolidated the Minimum Wages Act, the Payment of Wages Act, the Payment of Bonus Act and the Equal Remuneration Act into a single statute, and in doing so it introduced a concept the four older laws never had: a national floor wage. Section 9 lets the Central Government fix this floor after consulting the Central Advisory Board, based on minimum living standards that vary by region, and no state may set a minimum wage below it. States that already pay above the floor cannot use it as an excuse to cut their existing rates.
A year after the Code took effect, that floor wage has not been notified. Commentary through 2026 describes the Ministry as having only begun the underlying exercise in the middle of the year, and the practical consequence is that states continue to fix their own minimum wages much as they did before the Code arrived, without the statutory anchor the Code was designed to give them. An employer operating across several states should not assume a uniform wage floor exists simply because the Code that promises one is in force; until the notification issues, state-by-state minimum wage compliance remains the governing reality.
One change has already taken effect and is easy to miss. A notification dated 30 January 2026 raised the wage ceiling used to decide whether a supervisory employee counts as a "worker" for the Code's purposes, from fifteen thousand to eighteen thousan rupees a month. Any establishment that classified supervisory staff as excluded from worker protections at the old ceiling should revisit that classification now, since a supervisor earning between those two figures moved into the Code's protection without any change to their job.
The limitation period for wage claims is now a uniform three years from the date the claim arises, replacing windows that ran from six months to two years depending on which of the four older laws applied. The authority hearing a claim is expected to decide it within three months, with an appeal running ninety days from the order. For workers, this is a genuine improvement in access to a remedy; for employers, it means a wage dispute can resurface considerably later than the shorter limitation periods under the old regime would have allowed, and payroll records need to be kept with that longer tail in mind.
Standing orders and the shift to a 300-worker threshold
Under the industrial law that preceded the Industrial Relations Code, any industrial establishment employing one hundred or more workers had to frame certified standing orders governing classification of workers, hours, holidays, paydays, termination and grievance redressal. The Code raises that threshold to three hundred workers nationally, and the 2019 Bill's provision letting the government extend the standing-orders requirement to smaller establishments by notification was dropped before enactment, so no state has the power to lower this threshold today. In practice, this means a mid-sized factory or establishment that crossed one hundred workers and was accordingly bound by certified standing orders for years may now fall outside that obligation entirely.
This is not a trivial drafting change. Certified standing orders are legally enforceable conditions of service, and an establishment that drops below the compliance threshold loses the certainty that comes with a document the government has reviewed and certified, along with the protection that certification gives an employer against a later argument that its disciplinary or termination procedure was unfair. Establishments between one hundred and three hundred workers that let their certified standing orders lapse should think carefully about whether to retain them voluntarily through model standing orders or an equivalent internal policy, rather than operating without any certified framework at all.
Model standing orders, which the appropriate government prescribes and which apply by default to establishments the Code's certification requirement does not reach, have themselves been updated under the new framework and now extend expressly to larger establishments that choose not to certify their own. Any employer relying on model standing orders rather than a certified document specific to its own establishment should check the current model text against its actual practice, since a mismatch between the model text and what the establishment actually does is exactly the kind of gap a dismissed worker's lawyer will look for first.
The grievance redressal committees every Code-covered establishment must constitute have also changed shape. Membership has been expanded, and reporting consistently puts the new cap at ten members against the earlier six, while the window for a worker to raise a grievance has been shortened from three years to one year. A longer limitation period elsewhere in the Code sits awkwardly next to this shorter one, and establishments should not assume the three-year wage-claim window described above also applies to an internal grievance; it does not.
Fixed-term employment comes with statutory parity and a re-skilling fund
Fixed-term employment existed in Indian industrial practice before the Industrial Relations Code, but largely through administrative instructions rather than a clear statutory basis. The Code now gives it one: an employer may engage a worker directly, through a written contract, for a specified period, and that worker is entitled to the same wages, working hours, allowances, leave and other statutory benefits as a permanent worker doing comparable work. The point of the provision is to close the gap that had opened between permanent staff and contract or fixed-term staff doing identical work for different pay and benefits, without banning fixed-term engagement outright.
Retrenchment under the Code now also carries a dedicated funding mechanism that did not exist before. Where retrenchment is genuinely triggered, an employer must contribute an amount equal to fifteen days' wages last drawn by the retrenched worker into a re-skilling fund, and that fund must pay the equivalent amount into the worker's own account within forty-five days of retrenchment, on top of whatever retrenchment compensation is separately due. The intent is to give a retrenched worker a bridge toward re-employment or re-skilling rather than leaving the one-time compensation payment as the only cushion.
Gratuity eligibility is where fixed-term employment and social security now intersect most directly, and it is also where the guidance has moved furthest from the position most practitioners trained under. The Ministry's own Additional FAQs, issued on 16 March 2026, take the position that a fixed-term employee becomes eligible for gratuity after completing one year of service under the contract, rather than the five years the Payment of Gratuity Act required for everyone else. Several legal commentators published through mid-2026 have flagged that the statute itself leaves the precise qualifying method, particularly how a partial year within a fixed term is to be counted, less clear than the FAQ's one-line answer suggests, so an employer relying on this rule for a workforce with short fixed terms should document its own calculation approach carefully rather than assume the FAQ resolves every edge case.
Taken together, these three changes push an employer toward a straightforward choice: treat a fixed-term worker genuinely as a time-bound engagement with parity obligations attached, or convert the role to a permanent one. What is no longer available, at least as a matter of stated government policy, is using a fixed-term label to pay less for the same work or to avoid gratuity obligations until a five-year mark that for this category of worker no longer applies.
Retrenchment, lay-off and closure above and below the 300-worker line
The Industrial Relations Code carried over the basic retrenchment protections, a month's notice or pay in lieu, and retrenchment compensation of fifteen days' average pay for every completed year of service, while recasting the threshold that decides whether an employer needs prior government permission before retrenching, laying off, or closing a unit. That threshold now stands nationally at three hundred workers, up from one hundred, though a state government may notify a higher figure for its own territory, which means the practical threshold can differ from state to state once state rules catch up with the central framework.
Below three hundred workers, an employer must still give notice and pay compensation, but does not need government permission to proceed. A compliance guide placing this notice period at sixty days for closure, tied to Section 74 of the Code, is consistent with most of what this research found, though at least one source describes a ninety-day notice figure drawn from draft rules rather than the enacted provision, and an employer relying on either figure for a specific closure should confirm the applicable period against the Code's text and the rules actually notified in its own state before acting, since the two figures are not interchangeable and getting this wrong exposes the closure to challenge on procedural grounds alone.
At three hundred workers and above, prior government permission remains mandatory, and the employer's application has to be made well in advance of the planned action. This is where the Code's flexibility argument runs out: a large employer contemplating closure or significant retrenchment cannot simply give notice and proceed, and still needs to satisfy the appropriate government that the permission should be granted, exactly as under the pre-Code regime that applied the same logic at the lower one-hundred-worker mark.
For an employer currently sitting just above or just below either threshold, the practical advice is to track headcount carefully and to understand which of the two regimes, notice-only or notice-plus-permission, actually governs the establishment in its own state, rather than relying on the national default of three hundred. A state that has notified a higher threshold changes the analysis, since it moves more establishments into the notice-only category, and because state rule-making is still working its way through the system, that answer can change again within the same financial year.
Social security for gig workers, and what has not changed for everyone else
The Code on Social Security's most discussed innovation is its chapter on gig and platform workers, a category the four older social security laws did not recognise as a distinct class entitled to statutory protection at all. Section 114 requires aggregators falling within categories listed in the Seventh Schedule to contribute between one and two percent of their annual turnover toward social security for the gig and platform workers who work through them, capped at five percent of what the aggregator actually pays or is liable to pay those workers.
What is easy to miss in headlines describing this as a settled two-percent levy is that Section 114(5) leaves both the applicable rate and the date the obligation begins to a further notification by the Central Government, and as of this article that notification had not issued. An aggregator should not assume the contribution is currently payable at a specific rate simply because commentary describes the obligation in confident terms; the obligation exists in the statute, but its operative terms are still pending.
What is already operative, separately from the contribution rate itself, is the registration machinery. The Social Security (Central) Rules, 2026 require each new gig or platform worker to be registered on the government's portal in real time or, at minimum, daily, and set a compliance calendar for aggregators built around a provisional assessment and payment due by 30 June and an audited final return with any balancing payment due by 31 October. An aggregator that has treated the contribution rate's non-notification as a reason to ignore the Code's gig-worker provisions entirely has likely missed registration obligations that already bind it regardless of that rate.
It is also worth being precise about what this new architecture is not. The gig and platform worker framework does not create individual Employees' Provident Fund accounts for these workers; it is a separate, scheme-based structure funded in part by the aggregator levy once that levy is actually notified, running alongside rather than inside the existing EPF and ESI systems. For every other category of employee, the ESI wage ceiling has stayed where it was, at twenty-one thousand rupees a month, and the broader EPF and ESI contribution framework continues under its existing parameters pending the Code's own rules on those specific figures, so an employer should not expect the Code on Social Security to have changed anything yet for a conventional salaried workforce outside the gig and platform category.
Occupational safety: the inspector-cum-facilitator and what it changes day to day
The Occupational Safety, Health and Working Conditions Code replaces the traditional factory inspector with an inspector-cum-facilitator, a role the Code's own design intends to combine enforcement with guidance rather than treating every visit as adversarial. Central appointments under this system began rolling out through 2026, including a May notification making the Director General of Mines Safety the Chief Inspector-cum-Facilitator of Mines across every territory the Code extends to, with a parallel appointment covering major ports issued the same day, both made under Section 34 and both effective from gazette publication until superseded.
State governments are working through their own appointments on a slower and less uniform timetable, and the process is visibly still being adjusted rather than finished. Rajasthan, for example, amended its own July 2026 appointment notification as recently as 5 October 2026, correcting a single entry covering the Balotra area to read as all labour inspectors there rather than a named individual, a small change but one that illustrates how much of this machinery is still being assembled on the ground more than eleven months after the Code itself took effect.
For an employer, the practical shift is less about the inspector's title and more about what inspections are meant to look like under it. Commentary on the design consistently describes compliance verification, record examination and facilitation of statutory compliance, rather than enforcement alone, as the inspector-cum-facilitator's stated remit, which suggests a visit is meant to surface and help fix a gap before it escalates into a penalty, at least in principle. Whether that intention plays out in practice will depend heavily on how individual inspectors, many of them simply redesignated from their previous roles, actually exercise the discretion the new title gives them, and that is not something a single year of implementation can yet answer.
The Occupational Safety Code's central rules, notified on 9 May 2026, are described as operationalising compliance procedures and reporting mechanisms rather than introducing new substantive safety standards, which means an establishment already compliant with the safety and welfare requirements of the laws the Code replaced is unlikely to face materially new technical obligations, even as the administrative interface it deals with changes.
Compliance consolidation: one registration in theory, a portal still catching up in practice
A central promise of the four codes, separate from any individual worker-protection change, was to collapse the compliance burden of registering, licensing and reporting under multiple overlapping laws into a single system. The design folds registrations previously required under the Factories Act, the Mines Act, the Contract Labour Act, the Apprentices Act, the ESI Act and the EPF Act into one registration, one licence, and one return, with a government document describing a firm-level licence valid for five years as part of the intended structure.
Contract labour engagement has its own specific change worth flagging. The threshold below which a contractor needs no licence at all has been raised from twenty workers to fifty, which takes a meaningful slice of smaller contracting arrangements out of the licensing system entirely, and the licence that does remain necessary above that threshold is meant to operate on an all-India basis rather than requiring separate state-by-state licensing for the same contracting business.
How far this consolidation has actually reached an individual employer's desk is a different question from how the design reads on paper. One widely cited compliance calendar describes a unified portal and single-return system as dependent on the deployment of supporting government infrastructure, meaning the practical switch-over for a given employer follows the portal's own rollout timetable rather than the Code's commencement date. Existing registrations held under the old laws remain valid through this transition, so an employer has not been left without cover, but should not assume the promised single-window system is fully live for every purpose simply because the codes that authorise it are now in force.
The honest summary for any business operating across more than one state is that the single-registration promise is real as a matter of design and gradually real as a matter of practice, state by state and portal module by module, rather than uniformly available from a single date. Checking the current functional status of the relevant portal module before relying on it for a specific filing remains sound practice through the remainder of this transition period.
What courts have already been asked to decide
A code this large, replacing this much settled law, was always going to generate litigation about what survived the transition and what did not, and the first year has already produced several useful data points. The most significant is State of Uttar Pradesh v. Jai Bir Singh, 2026 INSC 897, in which a nine-judge bench of the Supreme Court revisited the definition of "industry" that the Court itself had set out in 1978 in Bangalore Water-Supply and Sewerage Board v. A. Rajappa. The bench held that the 1978 triple test continues to govern disputes pending under the old Industrial Disputes Act, but the Court was careful not to extend that holding automatically to the Industrial Relations Code's own definition of industry under Section 2(p), which textually excludes charitable, social and sovereign functions in terms the 1978 judgment did not use. What counts as an "industry" under the new Code, in other words, remains open for fresh argument rather than settled by simply importing the 1978 test wholesale.
A second thread concerns who can go to court, and over what, once the Code's own forums exist. The Karnataka High Court held on 24 July 2026, reported more widely in early August, in a dispute between Bosch Automotive Electronics and its workers' union, that a writ petition is generally not the right route for an employer trying to restrain a proposed strike, since a trade union is not "State" for the purposes of Article 226; the employer's remedy, the Court held, lies before the Industrial Tribunal enforcing the statutory restriction on strikes during conciliation, not before a writ court. Employers accustomed to seeking an injunction against a threatened strike should recalibrate that instinct under the new Code's forum structure.
A related gap shows up where the new Tribunals have not yet been constituted in a given state. A Madras High Court bench considered, in March 2026, whether a civil court could continue to entertain a trade union dispute where no Tribunal under the Code existed yet to hear it, with the respondent arguing that the civil court's jurisdiction survived precisely because the statutory alternative did not yet exist on the ground; this research could not confirm how that specific petition was finally decided, and the point is flagged here as unsettled rather than resolved.
Finally, the Code's own amendment process has itself drawn a constitutional challenge. A writ appeal pending before the Kerala High Court, listed for admission in May 2026, seeks a declaration that the Industrial Relations Code (Amendment) Act, 2026, including a change inserted into Section 104 in February 2026, is unconstitutional under Articles 14 and 21. The outcome of that appeal was not available at the time of writing, and it is worth tracking for anyone whose compliance position depends on the amended Section 104 remaining good law.
A year of operation has turned the four labour codes from a legislative promise into a working, if uneven, body of law. The Industrial Relations Code is the most completely in force of the four, the standing-order and retrenchment thresholds have genuinely moved, fixed-term employment now carries real parity obligations, and gig workers have a statutory hook, even an incomplete one, that simply did not exist before. None of that should be understated, and an employer that has not yet revisited its own classification of supervisory staff, its standing orders position at the new threshold, or its fixed-term contracts against the gratuity guidance is behind where it should be.
What should also not be overstated is how much of the framework still depends on machinery that has not finished being built. The national floor wage, the gig-worker contribution rate, a genuinely uniform single-registration system, and, in a majority of states, the rules that actually make the central codes operate locally, are all still arriving rather than already in place. Advising on any of these points requires checking the current notification status directly rather than relying on the state of play described even in careful commentary from a few months earlier, because on this subject a few months is routinely enough for the answer to change.
Frequently Asked Questions
Do the four labour codes apply to my business right now, or is my state still under the old laws?
Both can be true at once. The codes are centrally in force from 21 November 2025, but a given provision only functions on the ground once your state has notified its own rules under that code. Most states had not finished doing so as of this article, so check your specific state's labour department notifications before assuming the new regime governs you in full.
My factory has 150 workers. Do I still need certified standing orders?
No. Section 28 of the Industrial Relations Code fixes the standing-orders threshold at 300 workers nationally, and unlike an earlier bill version, the enacted Code gives no state the power to lower that figure. An establishment of 150 workers is accordingly no longer required to certify standing orders, though you may still want a model or voluntary framework in place.
Has the new national minimum wage actually come into effect?
No single national minimum wage exists yet. The Code on Wages creates a national floor wage under Section 9 below which no state may set its minimum wage, but that floor had not been notified as of this article. State minimum wages continue to apply largely as they did before the Code.
I employ several workers on fixed-term contracts of under a year. Do I owe them gratuity?
Government FAQ guidance from March 2026 treats one year of service under a fixed-term contract as the qualifying period for gratuity, on a pro-rata basis, rather than the five years required of other employees. If none of your contracts reaches a year, this specific obligation would not yet be triggered, but document your own calculation approach carefully given the unsettled detail around partial years.
As an aggregator running a gig platform, do I have to pay the new social security contribution now?
The contribution's rate and start date have not been separately notified, so the specific payment obligation under Section 114 is not yet operative. Registration duties for your gig and platform workers on the government portal, however, already apply and are not conditional on that notification, so check your registration compliance separately from the contribution question.
Can I still get a court injunction to stop a strike at my establishment?
The Karnataka High Court held on 24 July 2026 (widely reported in early August) that a writ petition against a trade union to restrain a proposed strike is generally not maintainable, since a union is not 'State' under Article 226. The Industrial Tribunal, not a writ court, is the forum the Code points an employer toward for enforcing the statutory restriction on strikes during conciliation.
References & Further Reading
The provisions, rulings and official documents below were relied on for this article, which states the law as on 21 October 2026. The position can change with amendments, rules and later decisions, so check the current text before acting on any of it.
- Code on Wages, 2019, Sections 9 (floor wage) and provisions on limitation and claims procedure
- Industrial Relations Code, 2020, including standing orders, fixed-term employment, re-skilling fund, retrenchment, lay-off and closure provisions, and Section 74
- Industrial Relations Code (Amendment) Act, 2026, including the amendment to Section 104 (February 2026)
- Occupational Safety, Health and Working Conditions Code, 2020, Section 34 (inspector-cum-facilitator)
- Code on Social Security, 2020, Chapter on gig and platform workers, Section 114 and Seventh Schedule
- Ministry of Labour and Employment commencement notifications S.O. 5319(E), S.O. 5320(E), S.O. 5321(E) and S.O. 5322(E), dated 21 November 2025
- Central Rules under the four Labour Codes, reported as notified 8 May 2026; Occupational Safety, Health and Working Conditions (Central) Rules, 2026, notified 9 May 2026
- Social Security (Central) Rules, 2026 (gig and platform worker registration and aggregator compliance calendar)
- MoLE notification dated 30 January 2026 raising the supervisory wage ceiling for the definition of 'worker' from Rs 15,000 to Rs 18,000 per month
- Ministry of Labour and Employment, Additional FAQs on the Labour Codes, 16 March 2026 (gratuity eligibility for fixed-term employees)
- State of Uttar Pradesh v. Jai Bir Singh, 2026 INSC 897 (Supreme Court, nine-judge bench)
- Bangalore Water-Supply and Sewerage Board v. A. Rajappa, (1978) 2 SCC 213
- Bosch Automotive Electronics strike-notice case, Karnataka High Court, August 2026
- Industrial Relations Code (Amendment) Act, 2026 constitutional challenge, Kerala High Court writ appeal (admission listed 22 May 2026)
- Civil court jurisdiction over trade union disputes pending Tribunal constitution, Madras High Court, March 2026
Related reading on this site
- Labour codes 2026 employer guide
- Model standing orders factories large establishments guide
- Fixed term employment contracts guide
- Retrenchment compensation industrial relations code guide
- Gratuity payment dispute employer refusal guide
- Esi registration compliance guide
- Epfo employer registration compliance guide
- Esi contribution contract workers principal employer guide
- Standing orders disciplinary proceedings guide