Centre, states work to finalize new labour regime

West Bengal has held out against the mandatory pre-publication of draft rules, while Tamil Nadu, Delhi and Lakshadweep remain in various stages of compliance, the people said on the condition of anonymity. West Bengal is ruled by the Trinamool Congress (TMC), Tamil Nadu by the Dravida Munnetra Kazhagam and Delhi by the Bharatiya Janata Party.

Delhi has pre-published one of the four codes—the draft rules under the Code on Social Security. It is likely to pre-publish the remaining codes in the coming months, one of the two people said.

Labour being a concurrent subject, both the Centre and each state and Union territory (UT) will need to notify the rules before a consultation window opens, and only thereafter will the code become operational in the states.

For states that haven’t notified/pre-published the codes yet, a 90-day consultation process is likely to begin after they have completed notifying all the codes.

“West Bengal is the only state that has not begun the process," said the second person. “Tamil Nadu has published rules for three codes, but the Code on Social Security is still being negotiated to resolve differences."

“Lakshadweep’s draft rules are ready and awaiting approval from the administrator before being made public," the second person added.

Spokespersons for the labour ministry, chief secretaries and labour secretaries of West Bengal, Tamil Nadu, Delhi and the office of the administrator of Lakshadweep didn’t respond to emailed queries sent on Sunday.

Phased rollout

“Discussions are ongoing with the states that have yet to publish the draft rules," said the first person.

The new labour codes — on wages, industrial relations, occupational safety, and social security — consolidate numerous overlapping laws into four integrated frameworks, covering wages, social security, industrial relations, and working conditions, to streamline compliance, reduce complexity, and expand coverage across the workforce.

Under the rollout plan, the Centre is soon expected to start a 45-day consultation period for states that have already notified their own rules. An additional 45 days will be allocated to incorporate public feedback, creating a 90-day transition, during which the states are expected to align with the central framework and upgrade digital systems for e-forms, registers and compliance processes.

Full implementation may take effect in the next financial year, once the rules and guidelines are notified, the consultation process ends and the necessary infrastructure and statutory bodies take shape.

Once implemented, the four codes will replace disparate statutes and are expected to simplify compliance procedures, reduce administrative friction for businesses, and support labour market reforms intended to improve job creation and investment conditions.

Modernizing regulation

The Centre’s announcement on 21 November marked the completion of a year-long legislative effort to consolidate 29 central labour laws into a streamlined framework intended to modernize regulation and create uniformity across states.

As of November 2025, after the Centre's announcement, only select provisions of the Code on Wages and the Code on Social Security are in force across all states and UTs.

According to the ministry of labour's annual report for FY25, 34 states and UTs had pre-published the draft rules for the Code on Wages, 33 states for the OSHWC Code (occupational safety), and 32 states and UTs for the Industrial Relations Code and Social Security Code.

Under the Wage Code, definitions, wage-payment timelines, universal applicability of minimum wages, and enforcement of timely payments have been operationalised.

The Social Security Code has partially activated provisions relating to employee state insurance, maternity benefits, gratuity, and certain EPF mechanisms.

However, several scheme-specific rules and detailed operational guidelines are still pending notification, delaying full implementation.

Implementation

“The compliance framework (for the four new labour codes) is aimed to be simpler, consistent, and easier for stakeholders to navigate," said Sudhakar Sethuraman, a partner at Deloitte India. “This is a significant and timely development for India, especially as the country witnesses rapid advancements in AI (artificial intelligence) while continuing to prioritise and protect its workforce."

However, some experts said the implementation of the new codes may benefit employers and the government more than the working class.

“These laws are designed in a way that the outcomes will now depend largely on the will of the government and employers rather than on rights guaranteed to labour," said Ajit Abhyankar, an economist, visiting faculty member at the Symbiosis School of Liberal Arts in Pune, and a social activist.

“The enforcement machinery, which was already struggling with staff shortages, has been further weakened under the new labour codes," he added.

The new labour codes mark some key changes, including mandatory written appointment letters for all workers, universal minimum wage protection, wider social security coverage extending to gig and platform workers, and free annual health check-ups for employees aged 40 and above.

The codes also allow women to work night shifts, introduce pan-India social security coverage managed by the Employees' State Insurance Corporation (ESIC) — including mandatory coverage for hazardous industries — and streamline compliance through single registration, licensing and return mechanisms.

The new codes include e-registers, online filings, and systems suited to modern work. The government says these reforms will strengthen worker protection, increase formalization, and make doing business easier.