Following work on the implementation of the Labor Codes, the government has issued draft rules for the four laws that clarify a variety of provisions, such as the calculation of the minimum wage rate, the creation of a National Social Security Board for workers, and provisions on layoffs.

The draft rules of the four codes – Wage Code, 2019, Safety, Health and Working Conditions Code, 2019, Labor Relations Code, 2020 and Social Security Code, 2020 have been published on the website of the Ministry of Labor and comments have been sought from stakeholders within 4 days to 30.

The draft rules are the next step in the implementation of the Labor Codes that came into effect on November 21, 2025. Once the labor ministry receives feedback from stakeholders, it will finalize and notify the rules, making all provisions of the Codes fully effective. Although no timetable has been given by the labor ministry, it is expected to be completed in the next two to three months.

The Secretary of Labor, Vandana Gurnani, has said that some sections of the Codes need rules, others do not and that they are already being applied. But a large number of sections need rules. “There would be 45 days for all interested parties to give their comments. We will review those comments and finally finalize the rules,” he had told BT in a recent interview.

The ministry has also been consulting with industry and other groups to understand and assess their concerns.

An FAQ issued by the ministry on the Codes has clarified that the old rules will remain in force until the final notification of the new Code rules, to the extent that they are in line with the Codes.

The definition of wages has also been detailed, which would cover all remuneration, whether in the form of salaries, allowances or otherwise payable to an employed person. “This includes: basic pay, charity allowance, retention allowance, if any. If the payments/allowances other than basic pay, charity bonus and retention allowance exceed 50% or the notified percentage of all remuneration, the higher amount of 50% or the notified percentage shall be added to the salary,” the PMF said.

He also clarified that the bonus will be applicable from November 21, 2025, the date of entry into force of the Code. Establishments can dispose in accordance with the accounting rules.

“The gratuity is payable on events such as discharge, superannuation (retirement on account of age), resignation, death or disability due to accident or disease, termination of a fixed-term employment contract and any other event notified by the Central Government,” he said.

The draft rules on the Wages Code have stipulated certain criteria for calculating the minimum wage rate. It will be based on a standard working-class family that includes a spouse and two children other than the earning employee; an equivalent to three adult consumption units; a net intake of 2,700 daily calories per unit of consumption; 66 meters of cloth per year per standard working class family; the cost of renting the house will constitute 10% of the cost of food and clothing; fuel, electricity and other miscellaneous items of expenditure that constitute 20% of the minimum wage; and spending for children’s education, medical requirements, recreation and contingency spending to constitute 25% of the minimum wage. The minimum wage will be recommended by the Central Advisory Council constituted by the Centre.

On layoffs, the draft rules of the Labor Relations Code, 2020, says that any industrial unit that has laid off workers will give them preference if they fill a vacancy within one year of the layoffs. It has also specified the process of the Workers’ Requalification Fund and has said that any employer who has dismissed a worker or workers from his industrial establishment, within 10 days from the date of assignment, will electronically transfer to the accounts an amount equivalent to 15 days of the last salary collected from this worker or workers dismissed.