Labor Law Compliance and Advisory

Factories Act and Labor law

Labor law has undergone major reforms in the year 2021.

In order to simplify and consolidate the labor laws of India, the Government has introduced 4 labor codes (Codes) which subsume 29 labor laws.

A similar consolidation of central labor laws in 4 broad categories was earlier recommended by the Second National Commission on Labor in 2002, which led to the Ministry of Labor and Employment introducing 4 codes in 2019 which regulate Wages (Wages), Industrial Relations (IR), Social Security (SS) and Occupational Safety, Health and Working Conditions (OSH).

While the Code on Wages, 2019 was passed by the Parliament, in 2019, the three other Bills were referred to a Standing Committee on Labor. These three Bills were replaced by the government with updated versions on September 19, 2020 based on the committee’s recommendations and were passed by the Union Legislature on September 23, 2020.

It is expected that these Codes will be brought into force from the next financial year, and a thorough understanding of the extant provisions is recommended for employers and employees alike.