• Source:JND
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Labour Code: The implementation of India’s new labour code is expected to bring a major change for unorganised sector workers, with wages set to rise across the country. According to estimates by the State Bank of India (SBI), workers in the unorganised sector may see their daily wages increase by up to Rs 95, which could translate into an additional Rs 3,000 per month. Economists believe the higher income will strengthen consumption and support economic growth, though it will also add financial pressure on businesses.

Labour Code: Gratuity Rules Eased; Payout After One Year of Service

A key part of the new labour code is the change in gratuity rules. At present, an employee must complete five years of service to qualify for gratuity. Under the revised rules, gratuity will be paid after just one year of contract work. Gratuity will also be calculated on the basis of total salary instead of basic salary, increasing the payout for workers and adding to the financial burden of employers.

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Labour Code: Centre To Introduce Uniform National Floor Wage

The Centre will introduce a national floor wage to ensure uniformity in minimum wages across states. Once announced, no state will be allowed to pay workers below this floor wage. The rule will apply to employees in all establishments, including offices, shops and private organisations. The floor wage is expected to be notified within the next three months.

Minimum Wage Gap Between States Likely To Narrow

Currently, minimum wages differ widely between states. In Rajasthan, unskilled workers earn less than Rs 8,000 per month, while in Bihar, Punjab, Haryana and Uttar Pradesh, the salaries range between Rs 11,000 and Rs 12,000. In Delhi, the minimum wage for unskilled workers is above Rs 18,000. A uniform floor wage is expected to reduce these disparities.

Appointment Letters To Become Mandatory Nationwide

NITI Aayog member Rajiv Gauba said the new code will make appointment letters mandatory for all categories of workers. Minimum wage rules, earlier limited to scheduled industries, will now apply across sectors. Consolidating 29 labour laws into four codes is expected to simplify compliance and attract investment.

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Industry Groups Warn of Higher Salary And Gratuity Costs

However, industry associations warn of rising costs. Anil Bhardwaj, General Secretary of the Federation of Indian Micro, Small and Medium Enterprises (FISME), said entrepreneurs will face higher expenses due to increased wages and gratuity obligations. The Labour Ministry has confirmed that the floor wage notification is nearing completion.

The code also allows units with fewer than 300 employees to shut down without government approval, compared to the current limit of 100. Industry bodies say this may encourage new investments, though wage-related cost increases remain a concern.

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