The Draft Rules Under the Labour Codes

The Government of India (hereinafter referred as GOI) has come up with the new labour laws, namely, Code of Wages 2019 (hereinafter referred as Wages Code), Code of Social Security, 2020 (hereinafter referred as Social Security Code), Occupational Safety, Health and Working Conditions Code, 2020 (hereinafter referred as OSHW Code) and Industrial Relation Code, 2020 (hereinafter referred as IR Code). The said acts are to be made effective from 21^st November 2025. In furtherance of these codes, the GOI has now issued Draft Central Rules (hereinafter referred as Rules) under these Code. A period of thirty days has been provided to the stakeholders for submission of objections/ suggestions on the Rules for the IR Code and 45 days for the Rules of other three codes.

Through a notification dated 30^th December 2025, the GOI has issued these below-mentioned Rules, namely.

1. The Code on Wages (Central) Rules, 2025 [hereinafter referred as CoW Rules]

2. The Code on Social Security (Central) Rules, 2025 [hereinafter referred as CoSS Rules]

3. The Occupational Safety, Health and Working Conditions (Central) Rules, 2025 [hereinafter referred as OSHW Rules]

4.  The Industrial Relation (Central) Rules, 2025 [hereinafter referred as IR Rules] The objective of the said Rules in to provide an effective mechanism consisting of guidelines and procedures for implementing the provisions of recently implemented labour codes. The Rules are a major stepping stone in the jurisprudence and application of the Labour Codes introduced in 2020 as it is the first detailed guidelines providing the procedure of application of the said codes. The draft rules shall apply to all central sector establishments including railways, minefield, oilfields, and banking companies, and establishments carried on or under the authority of the Central Government.[1] 

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Key Highlights of the Rules

1. Determination of what shall constitute wages – The Rules have effectively provided clarification on what constitutes wages under the newly-introduced labour laws. As per Rule 34 Explanation (i) and (ii) of the CoSS Rules, states that the wages shall exclude any payment payable on an annual basis, that is related to the performance or productivity of an employee or the establishment he is employed with and is not part of the remuneration payable under the employment terms. Hence, the wages shall essentially exclude the following – a. reimbursement of expenses, b. stock option benefit or cash equivalent of stock award, c. creche facilities, d. telephone and internet connection, and e. value of meal vouchers.[2] 

2. Fixation of minimum wages – Rules 3 of the CoW[3] Rules provides for the manner of calculation of minimum rate of wages. The Rules provide that the minimum wage is to be fixed in consideration with a standard working-class family, namely, one spouse and two children, equal to three adult consumption units. The rate is also determined through the skill category and the nature of the work.

According to Rules 4 of the CoW[4] Rules the calculation also takes into account the geographical location, industry type and working conditions, ensuring that wages accommodate living costs and sector-specific requirements.

3. Working hours and weekly rest days – Rule 6 and 7 of the CoW Rules[5] deals with the said subject. It is pertinent to note here that the Rules do not determine any number of hours to be worked in order to constitute a working day rather states that the number of hours required to be constituting a working day shall be as per general or special order issued from time to time. However, it ensures that the spread-over period includes intervals. Further, every employee is entitled to one rest day every week which is generally Sunday in a six-day week and Saturday and Sunday in a five-day week. Employers also have the discretion fix any other day as the rest day.

4. Terms related to Gratuity – Under Rule 34(1)(a) Proviso 2 of the CoSS Rules[6] the fixed term employees who render their service for at least one year are eligible for gratuity.

5. Overtime Wages – workers working beyond 48 hours of a week are entitled for overtime wages at twice the regular rate of wages and are paid at the end of each wage period. The Rules also emphasizes that for monthly-paid workers, daily wages are 1/26^th of the monthly wage and for the rest it is their actual daily earnings. The overtime working hours of an employee shall not be allowed to exceed 144 hours in a quarter of a year.

6. Determining the floor wage and its revision – Rule 11 of the CoW Rules discusses the manner of fixing floor wage and revision. The Rule prescribes that the Central Government shall consult the Central Advisory Board and shall consider the minimum standard of living inclusive of food, clothing, housing and any other factors considered appropriate by the Central Government. Thereafter, the Central Government shall share it with the State Government for obtaining their views before finalisation of the floor wages. The same shall be revised at interval not exceeding 5 years to keep it aligned with living standards.[7]

7. Annual health check-ups for employees – Under Rules 6 of OSHW Rules, the employer of every factory, dock, mine, building and other construction work is required to arrange free of cost medical check-ups within 120 days from the commencement of the calendar year, for employees who have completed 40 years of age. The Proviso to the rule also clarifies that the employer may avail such facilities through Employees’ State Insurance Corporation (ESIC) under CoSS Rules.

8. Facilities for women employees working night shifts – Rule 73 of the CoSS Rules establishes certain duties to be abided by the employer. The Rules prescribes that the prior consent of the women shall be obtained for the night shift. The employer shall further ensure safe transport facilities, and ensure amenities such as well-lit washrooms and safe drinking water. The workplace should be equipped with CCTV surveillance and surveillance shall also be provided for way to these facilities and the employer shall refrain from employing any woman employed against the maternity benefit provision laid down under Social Security Code. The employer shall also ensure that the telephone numbers of the establishment are displayed at a conspicuous place both at the establishment and inside the vehicle. The employer shall also comply with the provisions of Sexual Harassment at workplace (Prevention, Prohibition and Redressal) Act, 2013.

9. Provision related to Contract Labour – Contract worker regularly working under the employer through mutually agreed conditions shall receive an annual increment in wages of at least 2 percent. If such worker works in the principal employer’s premises then he shall be provided with basic facilities and amenities such as toilets, drinking water, bathing, canteen, creche etc.

10. Grievance Redressal Mechanism – Under Rule 174 of the OSHW Rules[8], the contract labours may submit their grievances to the principal employer. A committee may also be formed to address the complaints which shall consist of a Chairman (representative of principal employer), and it shall consist of representative of both contractors and employer. The grievance shall be resolved by the committee within a period of one month. If the same is not complied with then the employer shall forward the grievance to the concerned Inspector-cum-facilitator.    

Rule 6 of the IR Rules[9] also provide for grievance redressal mechanism whereby a Committee is required to be formed in an establishment employing more than twenty or more workers and the Rule also prescribes that it shall consist of equal number of members representing the employer and worker which shall not exceed ten. Women representative shall also be included and shall be in proportion to their workforce.    

11. Constitution of Works Committee – In pursuance of Rule 5 of the IR Rules, an establishment with more than 100 employees is mandatorily required to constitute Works Committee to ensure employer-worker co-operation. The total number of the members shall not exceed twenty. The committee shall consist of representative of both the parties and representatives of employer shall not exceed representatives of workers.

12.  Other highlights

a.  Rule 38 of Social Security Code[10] provides that every employer with more than 50 or more employees shall provide creche facilities for children under six years within one kilometre of the establishment.

b. Under Rule 91 of OSHW Rules[11] the Inter-state migrant workers are entitled to a journey allowance for round-trip for at least once in a year, after he completes 180 days of work.

c. Under Rule 7 of OSHW Rules[12] mandates that every employee shall be employed with issuance of an appointment letter and if it has not been issued and then the same shall be complied within three months of enforcement of this rule.

d. Chapter IX of the IR Rules provide for provisions related to re-employment of retrenched workers. It provides that the employer shall display the details of the vacancy on the notice board at least 15 days before filling positions and shall inform retrenched workers individually via registered post, email or speed post. The preference shall be given based on seniority, provided they are Indian citizens and are willing to undertake the occupation.    

The Rules have made an attempt to promote ease of doing business by simplifying the compliances and it provides for a comprehensive structure for implementation of the Codes but it is necessary for the employers, establishments or organisations to analyse them in detail in order to determine infallible compliance requirements.

Author: Anshita Kohli, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at  Khurana & Khurana, Advocates and IP Attorney.

[1] Rules & Regulations Review, Draft Rules under Code on Social Security, 2020, https://prsindia.org/billtrack/draft-rules-under-code-on-social-security-2020 

[2] Code on Social Security (Central) Rules, 2025.

[3] Code of Wages (Central) Rules, 2025.

[4] Ibid.

[5] Ibid.

[6] Ibid 2.

[7] Ibid 3.

[8] The Occupational Safety, Health and Working Conditions (Central) Rules, 2025.

[9] The Industrial Relation (Central) Rules, 2025.

[10] Ibid 2.

[11] Ibid 8.

[12] Ibid 8.