Unified Codes, Better Compliance

The decision to operationalize India’s four consolidated labour codes from April 2026 represents a significant yet carefully considered step toward reshaping the country’s labour governance architecture. Rather than rushing through a complex transition, the Union Government has chosen a measured path that reflects both administrative preparedness and respect for the feedback of workers, employers, and State governments. By bringing together 29 fragmented and often outdated pieces of legislation into four unified codes on wages, industrial relations, social security, and occupational safety, the reforms aim to replace ambiguity with clarity, duplication with coherence, and inconsistency with a more predictable regulatory framework.

The journey toward operationalizing these codes is now entering a crucial stage. The Ministry of Labour and Employment has begun work on updated draft rules that will soon be placed in the public domain for comments. This invitation for feedback is an important reaffirmation of the government’s stated intention that the transition should be participatory and inclusive. It acknowledges that the world of work has changed significantly since the earlier draft rules were prepared and that the law must align with contemporary realities. Once released, the updated draft rules will remain open for public scrutiny for 45 days, providing an opportunity for workers’ unions, industry associations, civil society groups, and labour experts to offer constructive suggestions. For workers, many aspects of the new framework offer reassurance rather than disruption. The eight-hour working day remains unchanged, and the core protections relating to wages, safety, and social security have been strengthened rather than diluted. At the same time, the codes allow workplaces to adopt global best practices, such as structured overtime arrangements, which can benefit both employees seeking additional income and industries requiring flexibility. The government has also expressed a strong commitment to expanding social security coverage to reach 100 crore workers by March 2026, a target that builds on the impressive growth from 19 percent coverage in 2015 to over 64 percent in 2025. If implemented well, this expansion could become one of the most important milestones in India’s labour welfare journey. For employers, the move toward simplification and uniformity promises to ease compliance burdens that historically resulted from navigating multiple laws with overlapping requirements. The unified framework aims to reduce uncertainty, minimise litigation, and promote a more business-friendly environment, especially for micro, small, and medium enterprises that often struggle with the administrative complexities of previous labour laws. A more predictable system is also likely to encourage investment, facilitate job creation, and support India’s ambition to strengthen its manufacturing and services sectors. However, the success of these reforms ultimately depends on the readiness and coordination of institutions. Labour is a concurrent subject, meaning both the Centre and States must notify their respective rules for the codes to be fully and uniformly applied. This requires close cooperation, capacity-building, and administrative alignment across multiple levels of governance. States will need to update their own rulebooks, train enforcement officials, streamline registration and inspection systems, and ensure that employers and workers understand the new requirements. The Centre’s push for digitizing compliance and documentation will help create transparency, but it also calls for adequate technological infrastructure and training at the grassroots level. As with any major reform, challenges will remain. Workers must be made aware of their rights under the new system, and employers must receive clear guidance to avoid confusion or unintentional non-compliance. Labour unions and industry bodies can play a helpful role by engaging constructively, highlighting ground realities, and ensuring that the voices of those most affected by the reforms are heard. If differences of interpretation arise, dialogue and consensus-building should take precedence over confrontation.

Ultimately, the consolidated labour codes mark a thoughtful effort to create harmony between worker protection and economic dynamism. By modernizing workplace norms, expanding social security, and simplifying compliance, the reforms have the potential to build a labour ecosystem that is fair, inclusive, and future-ready. But their success will not depend on legislation alone. It will rest on sustained administrative commitment, informed participation from all stakeholders and a shared willingness to adapt to a changing world of work.