Want to understand how labour laws in India affect your business or job? Whether you’re an HR professional, entrepreneur, or employee, understanding the Indian Labour Act is essential for staying compliant and protected in the workplace.
What Is the Indian Labour Act?
The Indian Labour Act refers to a system of Indian law pertaining to the employment relations, wages, industrial relations, work security, and social security of the employees within the country. The laws aim at balancing the working conditions for both the employers and employees.
In 2020, the Indian Government consolidated 29 existing labor laws into 4 main labor codes, essentially simplifying the system.
The 4 Labour Codes Explained
1. Code on Wages, 2019
This code regulates:
- Minimum wages
- Timely payment of salaries
- Equal pay for equal work
It applies to every employee across all industries—organized or unorganized.
2. Industrial Relations Code, 2020
This governs:
- Trade unions
- Strikes and lockouts
- Layoffs and retrenchments
It helps improve communication between employers and workers while ensuring business flexibility.
3. Occupational Safety, Health and Working Conditions Code, 2020
Covers:
- Workplace safety standards
- Sanitation and health conditions
- Working hours and holidays
It applies to factories, mines, warehouses, and construction sites.
4. Social Security Code, 2020
Includes:
- Employees’ Provident Fund (EPF)
- Employee State Insurance (ESI)
- Gratuity and maternity benefits
It brings various welfare schemes under one umbrella for better access and transparency.
Why It Matters for Businesses and Workers
For Employers:
- Avoid heavy labour law penalties
- Maintain ethical and legal workplace standards
- Build trust and retain talent
For Employees:
- Know your labour rights in India
- Ensure fair treatment, wages, and safety
Access social benefits like PF, ESI, and leave entitlements
Conclusion
The Indian Labour Codes are significant in terms of both protecting employee rights and simplifying compliance. If you are a businessperson or an HR professional, now is the time to learn the codes and stay ahead.
Strategic compliance with these laws not only positions the Indian system as trustworthy, but also leverages labor laws as a strength.