The Centre has deferred the implementation of the four labour codes, originally due on April 1, as several state governments have still not finalised the relevant rules, giving more time to companies to realign their salary structures in line with the new legal provisions.
The delay, however, will adversely impact migrant workers and gig workers, including workers engaged with platforms like Ola and Uber, who will now have to wait longer to receive benefits that were to flow to them under the new law.
Since labour is a concurrent subject under the Constitution, both the Centre and states are required to notify rules under the codes to enforce the law in their respective geographies.
Although the ministry had earlier said implementation of the central laws will not be contingent on states making their rules, a senior government functionary, said, “We would like to have some major states ready at least.”
Key states such as UP, Bihar, Madhya Pradesh, Haryana and Uttarakhand have only circulated the draft rules for two codes, while Karnataka has circulated draft rules for one code. Jammu and Kashmir is the only state that has finalised its rules so far.
The labour ministry had planned to implement the four labour codes — on industrial relations, wages, social security and occupational health safety and working conditions — from April 1.
The ministry has also finalised the rules under the four codes. Government sources said there is no clarity as yet on when the codes may now be implemented, since it is now contingent on getting at least a few major states on board.
Putting off the implementation of the code on wages, which is among the four new laws awaiting enforcement, will give companies a temporary breather from making changes to employees’ take home salaries or their provident fund liabilities. The new code caps allowances at 50% of an employee’s basic income and provides for provident fund contribution as a prescribed proportion of 50% of gross pay. The new law, experts said, are expected to increase employee costs for companies.
