Status Update on Implementation of Labour Codes in India

As provided under the year-end review by the Ministry of Labour and Employment (“Ministry”), all States and Union Territories (UTs) are expected to complete harmonization and pre-publication of the draft rules under the four labour codes by March 31, 2025. The four labour codes include the Code on Wages 2019, Industrial Relations Code, 2020, Code on Occupational Safety, Health and Working Conditions, 2020, Social Security Code, 2020 (collectively “Codes”).

The Ministry has been consistently working towards ensuring uniformity in the implementation of the Codes across all States/UTs. The Ministry conducted 6 (six) regional meetings between August and October 2024 to facilitate this process and provided guidance on framing the rules. During the said period, Nagaland has pre-published draft rules under Code on Social Security and the Occupational Safety, Health & Working Conditions Code, Sikkim has pre-published draft rules under the Occupational Safety, Health & Working Conditions Code and Andaman & Nicobar Islands have pre-published draft rules under the Industrial Relations Code.

Furthermore, the Ministry has identified key labour law reforms to enhance the ease of doing business by reducing compliance burden, including (i) Single Registration; (ii) Single Return; (iii) Firm-based common license with 5 (five) years validity; and (iv) Transition of Inspectors to Inspector-cum-Facilitators.

In light of the above, all States and UTs that have not yet initiated or finalized their respective draft rules within the ambit of the Codes, are urged to take immediate steps to finalize and publish the same before March 31, 2025.

With states finalizing their draft rules, the implementation of the Codes will steadily progress as well. If the process continues at the expected pace, the Codes may come into effect later this year.