Changes in New Labour Codes from Old Labour Acts in India
Twenty-nine central labour laws were folded into four codes. This page maps the old regime against the new one — definitions, thresholds, benefits, penalties — so you can revise the shift without flipping between statutes.
Why the codes exist
The Indian government consolidated 29 central labour laws into four new labour codes between 2019 and 2020 to simplify compliance, promote ease of doing business, and extend protections to unorganized and gig workers. The codes are: the Code on Wages, 2019; the Industrial Relations Code, 2020; the Code on Social Security, 2020; and the Occupational Safety, Health and Working Conditions Code, 2020.
The old laws were fragmented, with overlaps, inconsistent definitions and a heavy compliance load — more than 1,200 provisions across multiple acts. The new codes cut that to about 480 provisions, introduce a uniform definition of “wages”, add fixed-term employment with statutory benefits, recognise gig and platform workers, and push electronic registration and returns.
Critics argue the package also tilts toward employers: layoff/closure permission thresholds rise, strike rules tighten, and union multiplicity is squeezed through a single negotiating union. The tables below keep both sides of that ledger visible.
What got simpler
One wage definition, fewer registers, electronic returns, inspector-cum-facilitators, compounding of offences.
What got wider
Minimum wages for all employees, gig/platform social security, appointment letters, women night shifts with safeguards.
What got higher
Layoff permission at 300 workers (from 100), contract-labour licence at 50 (from 20), larger fines.
Exam hook
Remember the merger counts: 4 + 3 + 9 + 13 = 29. Pair each code with its repealed parent acts.
Code on Wages, 2019
Merges Payment of Wages Act, 1936 · Minimum Wages Act, 1948 · Payment of Bonus Act, 1965 · Equal Remuneration Act, 1976
Aims: one wage definition, a national floor wage, gender neutrality, and coverage without wage ceilings. Employers must keep exclusions from “wages” within 50% of total remuneration — otherwise the excess is treated as wages and lifts PF, gratuity and bonus liability.
Key definitions — old vs new
| Term | Old definition | New definition | Impact |
|---|---|---|---|
| Wages | Old acts Varied across statutes. Payment of Wages Act included salary, allowances, overtime; Minimum Wages Act focused on scheduled employments. No uniform cap on exclusions. | 2019 Code All remuneration in money: basic + DA + retaining allowance. Excludes bonus, house accommodation, PF/pension, conveyance, HRA, overtime, gratuity, commission. Exclusions capped at 50%; excess treated as wages. | Uniform base for PF/gratuity. Pay structures often need redesign; costs can rise 10–15% where allowances were padded. |
| Employee | Old acts Payment of Wages Act: earners below ₹24,000/month. Minimum Wages Act: scheduled employments only. | 2019 Code Any person (except apprentices) employed on wages for skilled to managerial / clerical work. No wage threshold. | Managers and unorganised workers come in. Broader minimum-wage net; more compliance for small firms. |
| Employer | Old acts Owners, managers or persons in supervision/control — wording differed by act. | 2019 Code Owner/occupier, manager, or person in control; for contractors, the principal employer. | Clearer multi-employer liability. |
| Bonus | Bonus Act Allocable surplus; min 8.33%, max 20%; disqualification for fraud/theft. | 2019 Code Same band, plus disqualification for sexual-harassment conviction; payable even if a dispute is before a tribunal. | Minimum bonus survives litigation; extra HR accountability. |
Key changes in provisions
| Subject | Old provision | New provision | Impact |
|---|---|---|---|
| Applicability | Scheduled employments or wage ceilings (₹24,000 under Payment of Wages Act). | All establishments and employees; no wage limit. | Near-universal wage rights; fewer parallel filings, higher coverage cost. |
| Floor wages | No central floor; state rates varied widely (often ₹100–400/day). | Centre sets a floor; states cannot go below it. Regional/skill variations allowed. | Stops wage dumping across states; can lift wages in poorer regions. |
| Claim period | Typically 6–12 months. | 3 years from the due date. | Workers get a longer window; employers need tighter records. |
| Mode of payment | Cash/cheque; electronic not mandated. | Bank/electronic transfer; cash only for claims under ₹1,000. | Less leakage; rural unbanked workers need inclusion support. |
| Gender discrimination | Equal Remuneration Act barred unequal pay for the same work. | Ban extends to recruitment, transfers and promotions for same/similar work; all genders. | HR policies have to cover the full employment cycle. |
| Bonus in disputes | No special rule during litigation. | Minimum 8.33% still payable; sexual-harassment conviction added as a bar. | Protects workers mid-dispute. |
| Registers / returns | 10+ registers and multiple returns across acts. | 2 registers, 1 annual return. | Paperwork cut sharply for SMEs. |
| Penalties | Small fines (often ₹500–1,000); no compounding. | Up to ₹50,000 first offence, ₹1 lakh repeat; compounding at 50%. | Inspector-cum-facilitators advise before they punish. |
Industrial Relations Code, 2020
Merges Trade Unions Act, 1926 · Industrial Employment (Standing Orders) Act, 1946 · Industrial Disputes Act, 1947
The IR Code legalises fixed-term employment with benefit parity, lifts the government-permission threshold for layoff/retrenchment/closure from 100 to 300 workers, and tries to end multi-union chaos through a sole negotiating union or council. Strike notice becomes universal.
Key definitions — old vs new
| Term | Old definition | New definition | Impact |
|---|---|---|---|
| Worker | ID Act “workman” Non-managerial; early wage cap around ₹10,000 (later raised). | IR Code Skilled to clerical work; includes journalists and sales employees; excludes managerial and supervisors earning above ₹15,000/month. | More white-collar coverage; high-earner supervisors stay out. |
| Industry | Very broad business/trade test, with judicial carve-outs. | Excludes charitable/philanthropic institutions, sovereign functions (e.g. defence), domestic service. | Fewer “is this an industry?” cases; some NGO/hospital workers may fall outside. |
| Fixed-term employment | Not defined; often treated as permanent, inviting retrenchment claims. | Contract for a fixed period with pro-rata statutory benefits, including gratuity. | Legal flexibility for seasonal and project work; misuse risk if rollovers never convert. |
| Strike | Notice mainly in public utilities; flash strikes not cleanly banned everywhere. | 14-day notice for all; banned during conciliation/arbitration; flash strikes illegal. | Fewer sudden stoppages; unions lose surprise as leverage. |
Key changes in provisions
| Subject | Old provision | New provision | Impact |
|---|---|---|---|
| Fixed-term employment | No statutory scheme; hires could harden into permanence. | Full statutory benefits; gratuity after 1 year; no retrenchment on natural expiry. | Useful for manufacturing/IT staffing; “perma-temp” concern remains. |
| Layoff / retrenchment / closure | Prior permission at ≥100 workers in factories/mines. | Threshold raised to ≥300; government may notify a different number. Reskilling fund: 15 days’ wages. | Most establishments under 300 operate without prior sanction. Job-security debate is the political core of this code. |
| Strike / lockout | 14-day notice only in public utilities; action possible during adjudication. | 14-day notice for all; barred during conciliation (60-day validity), arbitration, and 60 days after an award. | Pushes disputes into process; critics say it blunts collective bargaining. |
| Negotiating union / council | No statutory sole-bargaining agent; multiple unions common. | Sole negotiating union if it has more than 51% membership; else a negotiating council. | Cleaner bargaining table; small unions lose independent leverage. |
| Industrial tribunal | Single member. | Two members — judicial + administrative. | More specialised benches, aim is faster awards. |
| Penalties | Lower fines; no compounding. | Up to ₹10 lakh and 6 months’ jail; compounding at 50–75%. | Higher sting, quicker closure if compounded. |
Code on Social Security, 2020
Merges nine laws including EPF Act, 1952 · ESI Act, 1948 · Maternity Benefit Act, 1961 · Payment of Gratuity Act, 1972 · Unorganised Workers’ Social Security Act, 2008 and others
This is the inclusivity code: gig and platform workers are named in statute, fixed-term staff get pro-rata benefits, and registration is meant to be electronic and portable. Aggregators can be asked to contribute a small share of turnover to welfare schemes.
Key definitions — old vs new
| Term | Old definition | New definition | Impact |
|---|---|---|---|
| Gig worker | Not defined; usually outside PF/ESI. | Person working outside a traditional employer–employee relationship (freelancers and similar). | Opens scheme design for a large, previously invisible workforce. |
| Platform worker | Not defined. | Work organised through an online intermediary. | App-based work (cabs, delivery, tasks) can be brought into welfare boards. |
| Fixed-term employee | Gratuity typically after 5 years’ continuous service. | Fixed-period contract with pro-rata benefits. | Gratuity clock can start after one year. |
| Social security | Split: organised sector PF/ESI; thin cover for unorganised workers. | PF, gratuity, maternity, insurance plus schemes for unorganised/gig workers under central and state boards. | One conceptual umbrella; delivery still depends on registration and funding. |
Key changes in provisions
| Subject | Old provision | New provision | Impact |
|---|---|---|---|
| Gig / platform schemes | No dedicated statutory scheme. | Central schemes for life/disability, health/maternity, old age; aggregators may contribute 1–2% of turnover. | First statutory hook for platform work; cost question for startups. |
| Gratuity | 5 years continuous service; fixed-term often excluded. | Pro-rata for fixed-term of 1+ year; wage base follows the new definition. | Short-tenure staff gain; employer provisioning rises. |
| Registration | Separate, mostly manual filings under each act. | Electronic; registration under one law can be deemed for another. | Less duplicate paperwork for establishments. |
| Limitation for dues | PF inquiries could run without a tight outer limit. | 5 years for inquiries; 2 years after dues become payable. | Old, open-ended claims are harder to revive. |
| Penalties | Lower; repeats not always enhanced. | Up to ₹3 lakh and 2 years’ jail; higher for repeats; compounding 50–75%. | Stronger enforcement toolkit; opt-in coverage possible with worker consent in some settings. |
Occupational Safety, Health and Working Conditions Code, 2020
Merges 13 laws including Factories Act, 1948 · Contract Labour Act, 1970 · Inter-State Migrant Workmen Act, 1979 · Mines Act, 1952 · Plantation Labour Act, 1951 and others
OSH widens “establishment”, standardises hours, allows women on night shifts with consent and transport, raises the contract-labour licence threshold, and writes migrant journey allowances and helplines into the statute. Appointment letters become a baseline formalisation tool.
Key definitions — old vs new
| Term | Old definition | New definition | Impact |
|---|---|---|---|
| Worker | Factory-centric in many acts; managers usually out. | Any work; includes journalists/sales; excludes managerial and supervisors above ₹18,000/month. | Offices and hotels sit inside the safety net once headcount crosses the threshold. |
| Establishment | Factories often at ≥10 with power / ≥20 without. | Any place of industry or trade, including commercial units with 10+ workers. | Services sector is no longer a legal afterthought. |
| Contract labour | Broad; supply-chain and part-time arrangements often swept in. | Hired through a contractor; regular employees with benefits/increments are excluded. Core-activity use is restricted. | Pushes perennial core work onto direct or fixed-term rolls. |
| Inter-state migrant worker | Mostly contractor-recruited; no wage cap in the old act’s core idea. | Self-recruited or contractor-recruited, earning ≤ ₹18,000/month. | Voluntary migrants enter the definition; journey allowance for batches of 10+. |
Key changes in provisions
| Subject | Old provision | New provision | Impact |
|---|---|---|---|
| Working hours | Varied (often 9 hours in factories); overtime consent uneven. | Max 8 hours/day, 48/week; overtime only with consent, at 2× rate. | A single national clock, with sector flexibility still possible by notification. |
| Women night shifts | Prohibited or tightly restricted in several acts. | Allowed 7 pm–6 am with consent, transport and safety arrangements. | Opens shifts in services/manufacturing if safeguards are real, not paper. |
| Contract labour | Licence from 20 workers; usually 1-year validity. | Threshold 50+; licence up to 5 years; core activity generally barred except sudden spikes or similar exceptions. | Easier multi-state contracting; principal employer still carries welfare liability. |
| Welfare facilities | Factory-specific (canteens often above 250). | Canteens above 100, crèches above 50 women, medical facilities; safety committees above 500. | Non-factory workplaces pick up factory-like amenities. |
| Migrant workers | Largely contractor-mediated; no lump-sum journey allowance in a unified code. | Journey allowance, toll-free helpline, worker database. | Aimed at construction and agriculture mobility without distress. |
| Penalties | Often ₹1,000–5,000. | Up to ₹2 lakh plus jail; doubles on repeat; compounding 50–75%. | Prevention-first inspections, heavier tail for wilful breaches. |
Comments
8 responses to “Changes in New Labour Codes from Old Labour Acts in India”
[…] History of Labour Laws in India Introduction to Labour Laws in India Constitutional Framework for Labour Laws Industrial Relations Code, 2020 Code on Wages, 2019 Occupational Safety, Health and Working Conditions Code, 2020 Code on Social Security, 2020 Factories Act, 1948 Minimum Wages Act, 1948 Payment of Wages Act, 1936 Equal Remuneration Act, 1976 Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 Employees’ State Insurance Act, 1948: Maternity Benefit Act, 1961 Payment of Gratuity Act, 1972 Bonded Labour System (Abolition) Act, 1976 Child Labour (Prohibition and Regulation) Act, 1986 Contract Labour (Regulation and Abolition) Act, 1970 Trade Unions Act, 1926 Inter-State Migrant Workmen Act, 1979 Plantation Labour Act, 1951 Mines Act, 1952 All Changes in New Codes from Old Acts […]
[…] History of Labour Laws in India Introduction to Labour Laws in India Constitutional Framework for Labour Laws Industrial Relations Code, 2020 Code on Wages, 2019 Occupational Safety, Health and Working Conditions Code, 2020 Code on Social Security, 2020 Factories Act, 1948 Minimum Wages Act, 1948 Payment of Wages Act, 1936 Equal Remuneration Act, 1976 Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 Employees’ State Insurance Act, 1948: Maternity Benefit Act, 1961 Payment of Gratuity Act, 1972 Bonded Labour System (Abolition) Act, 1976 Child Labour (Prohibition and Regulation) Act, 1986 Contract Labour (Regulation and Abolition) Act, 1970 Trade Unions Act, 1926 Inter-State Migrant Workmen Act, 1979 Plantation Labour Act, 1951 Mines Act, 1952 All Changes in New Codes from Old Acts […]
[…] History of Labour Laws in India Introduction to Labour Laws in India Constitutional Framework for Labour Laws Industrial Relations Code, 2020 Code on Wages, 2019 Occupational Safety, Health and Working Conditions Code, 2020 Code on Social Security, 2020 Factories Act, 1948 Minimum Wages Act, 1948 Payment of Wages Act, 1936 Equal Remuneration Act, 1976 Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 Employees’ State Insurance Act, 1948: Maternity Benefit Act, 1961 Payment of Gratuity Act, 1972 Bonded Labour System (Abolition) Act, 1976 Child Labour (Prohibition and Regulation) Act, 1986 Contract Labour (Regulation and Abolition) Act, 1970 Trade Unions Act, 1926 Inter-State Migrant Workmen Act, 1979 Plantation Labour Act, 1951 Mines Act, 1952 All Changes in New Codes from Old Acts […]
[…] History of Labour Laws in India Introduction to Labour Laws in India Constitutional Framework for Labour Laws Industrial Relations Code, 2020 Code on Wages, 2019 Occupational Safety, Health and Working Conditions Code, 2020 Code on Social Security, 2020 Factories Act, 1948 Minimum Wages Act, 1948 Payment of Wages Act, 1936 Equal Remuneration Act, 1976 Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 Employees’ State Insurance Act, 1948: Maternity Benefit Act, 1961 Payment of Gratuity Act, 1972 Bonded Labour System (Abolition) Act, 1976 Child Labour (Prohibition and Regulation) Act, 1986 Contract Labour (Regulation and Abolition) Act, 1970 Trade Unions Act, 1926 Inter-State Migrant Workmen Act, 1979 Plantation Labour Act, 1951 Mines Act, 1952 All Changes in New Codes from Old Acts […]
[…] History of Labour Laws in India Introduction to Labour Laws in India Constitutional Framework for Labour Laws Industrial Relations Code, 2020 Code on Wages, 2019 Occupational Safety, Health and Working Conditions Code, 2020 Code on Social Security, 2020 Factories Act, 1948 Minimum Wages Act, 1948 Payment of Wages Act, 1936 Equal Remuneration Act, 1976 Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 Employees’ State Insurance Act, 1948: Maternity Benefit Act, 1961 Payment of Gratuity Act, 1972 Bonded Labour System (Abolition) Act, 1976 Child Labour (Prohibition and Regulation) Act, 1986 Contract Labour (Regulation and Abolition) Act, 1970 Trade Unions Act, 1926 Inter-State Migrant Workmen Act, 1979 Plantation Labour Act, 1951 Mines Act, 1952 All Changes in New Codes from Old Acts […]
[…] History of Labour Laws in India Introduction to Labour Laws in India Constitutional Framework for Labour Laws Industrial Relations Code, 2020 Code on Wages, 2019 Occupational Safety, Health and Working Conditions Code, 2020 Code on Social Security, 2020 Factories Act, 1948 Minimum Wages Act, 1948 Payment of Wages Act, 1936 Equal Remuneration Act, 1976 Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 Employees’ State Insurance Act, 1948: Maternity Benefit Act, 1961 Payment of Gratuity Act, 1972 Bonded Labour System (Abolition) Act, 1976 Child Labour (Prohibition and Regulation) Act, 1986 Contract Labour (Regulation and Abolition) Act, 1970 Trade Unions Act, 1926 Inter-State Migrant Workmen Act, 1979 Plantation Labour Act, 1951 Mines Act, 1952 All Changes in New Codes from Old Acts […]
[…] History of Labour Laws in India Introduction to Labour Laws in India Constitutional Framework for Labour Laws Industrial Relations Code, 2020 Code on Wages, 2019 Occupational Safety, Health and Working Conditions Code, 2020 Code on Social Security, 2020 Factories Act, 1948 Minimum Wages Act, 1948 Payment of Wages Act, 1936 Equal Remuneration Act, 1976 Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 Employees’ State Insurance Act, 1948: Maternity Benefit Act, 1961 Payment of Gratuity Act, 1972 Bonded Labour System (Abolition) Act, 1976 Child Labour (Prohibition and Regulation) Act, 1986 Contract Labour (Regulation and Abolition) Act, 1970 Trade Unions Act, 1926 Inter-State Migrant Workmen Act, 1979 Plantation Labour Act, 1951 Mines Act, 1952 All Changes in New Codes from Old Acts […]
[…] History of Labour Laws in India Introduction to Labour Laws in India Constitutional Framework for Labour Laws Industrial Relations Code, 2020 Code on Wages, 2019 Occupational Safety, Health and Working Conditions Code, 2020 Code on Social Security, 2020 Factories Act, 1948 Minimum Wages Act, 1948 Payment of Wages Act, 1936 Equal Remuneration Act, 1976 Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 Employees’ State Insurance Act, 1948: Maternity Benefit Act, 1961 Payment of Gratuity Act, 1972 Bonded Labour System (Abolition) Act, 1976 Child Labour (Prohibition and Regulation) Act, 1986 Contract Labour (Regulation and Abolition) Act, 1970 Trade Unions Act, 1926 Inter-State Migrant Workmen Act, 1979 Plantation Labour Act, 1951 Mines Act, 1952 All Changes in New Codes from Old Acts […]