The Ministry of Labour and Employment has released draft rules for four new labour codes: the Wage Code, Industrial Relations Code, Social Security Code, and Code on Safety, Health and Working Conditions.
drafts have been shared to gather opinions from the general public and other stakeholders.
The new labour laws will become fully effective only after these rules are finalized and implemented. The notification for these four codes was already issued on November 21, 2025.
The government is aiming to implement these labour laws nationwide from April 1, 2026. Since labour issues are included in the Concurrent List of the Constitution, it is necessary for state governments to prepare their own rules as well.
Therefore, state governments are in the process of officially publishing these regulations.
To ensure proper feedback, the Union Labour Ministry has provided 30 days for suggestions on the Industrial Relations Code and 45 days for suggestions on the other three codes.
This process will give industries and workers clear and practical guidance on the new laws.
Benefits for Workers and Industry
The new labour codes aim to provide multiple benefits for workers. Once implemented, they will ensure:
Mandatory appointment letters for all workers.
Free medical check-ups for workers aged 40 and above.
Equal pay for equal work, ensuring fairness in the workplace.
Equal opportunities for women, including access to different shifts.
The government’s goal is to expand labour protection, make business operations smoother, and create a worker-friendly labour environment.
These changes are designed to balance the needs of workers and employers while modernizing labour regulations.
Social Security Target and Coverage
Union Labour Minister Mansukh Mandaviya stated that the new draft rules have been updated to match current needs.
The government aims to provide social security coverage to 1 billion workers (100 crore) by March 2026, up from 940 million today.
Social security coverage has steadily increased, reaching 64% in 2025 compared to just 19% in 2015, reflecting the government’s focus on improving worker welfare.
Salary Deductions and Benefits
The new laws also set limits on deductions from an employee’s salary. According to these rules:
Deductions from any employee’s salary cannot exceed 50%.
These deductions include basic salary, DA, and other allowances, which together will form a maximum of 50% of the total CTC (Cost to Company).
The remaining 50% includes benefits like HRA, bonus, commission, PF, and other allowances.
If these benefits exceed the 50% limit, any extra amount will automatically be added to the salary.
This ensures transparency in salary structures and protects employees from excessive deductions, while maintaining a balance between fixed salary and benefits.
