Labour Ministry Releases Draft Rules for New Labour Codes, Seeks Public Feedback

The Ministry of Labour and Employment has notified revised draft rules for the four new Labour Codes. These rules aim to clarify key provisions related to wages, gratuity, retrenchment, and gig workers.

The government has invited comments and suggestions from stakeholders for a period of 30 to 45 days before finalising the rules.

Timeline for Consultation and Implementation

The 4 Labour Codes were enacted on November 21. After holding discussions with stakeholders, the draft rules were published on December 31, 2025.

Once the consultation period ends, the government plans to notify the final rules with the goal of full implementation from April 1, 2026.

Clarity on Wages and Gratuity Calculation

The draft rules provide long-awaited clarity on how gratuity will be calculated. Gratuity will be based on the last drawn wages, excluding components such as:

• Performance-linked bonuses
• Medical reimbursements
• Stock options
• Meal vouchers

Old Rules to Continue for Now

The ministry has clarified through FAQs that existing labour rules will continue until the new rules are officially notified, as long as they are consistent with the Labour Codes.

This ensures continuity and avoids disruption during the transition phase.

Impact on Compliance Costs and State-Level Implementation

In the short term, organised employers may face higher compliance requirements, especially due to:

• Expanded reporting
• Registration of gig and platform workers
• Increased social security coverage

Since labour laws fall under the concurrent list, actual implementation from April 2026 will depend on individual states. Differences in state infrastructure and administrative capacity may lead to uneven execution.

Addressing Overlaps with Existing Labour Laws

The four Labour Codes aim to merge 29 existing labour laws into a simpler framework. The draft rules clarify overlaps with laws such as EPF, ESI, and contract labour regulations, which is expected to reduce legal disputes.

Read more: Sthree Suraksha Scheme Application Form: Kerala Women Can Apply Online to Get ₹1,000 Monthly Aid.

New Provisions for Gig and Platform Workers

The draft rules also provide clarity on gig worker protections. Key steps include:

• Formation of a National Social Security Board for gig and platform workers
• Mandatory registration of all gig workers on a central government portal
• Clear guidelines on how aggregators will contribute to social security

These measures are expected to formally recognise gig workers and expand their access to social security benefits.

Conclusion

The revised draft rules under the four Labour Codes mark an important step toward modernising India’s labour framework. With clearer definitions on wages, gratuity, and gig worker coverage, the rules aim to reduce confusion and improve compliance. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.