New Labor Codes- India Reforms Labor and Employment Laws, Expands Rights
- Code on Wages, 2019. This code was enacted in 2019 and is effective now. The code establishes a minimum wage that can vary by region, extends wage protections to all employees, sets out permitted wage deductions by employers, prohibits gender pay discrimination for work of a similar nature, and requires wage payments to be daily, weekly, fortnightly or monthly. The code also enforces the remuneration into inclusions and exclusions which will impact social security entitlements.
- Code on Social Security, 2020. This code expands social security coverage to all workers, including those in nontraditional employment relationships, such as independent contractors and gig economy workers. Social security benefits must include insurance to cover accidents, life, disability, health, old age, maternity benefits, child care, and gratuity (an employer payment given on the employee’s retirement or earlier, subject to meeting certain conditions).
- Occupational Safety, Health and Working Conditions Code, 2020. This code applies to all employers with 10 or more workers, requiring employers to register on a centralized database. Employee protection will apply to a wider range of organizations, and will include working hours, leave entitlement, overtime hours and pay, and weekly rest periods.
- Industrial Relations Code, 2020. This code covers most employers (with some specified exclusions) and addresses trade union rights, including requiring employers to recognize a negotiating union to represent the employees, and the settlement of industrial disputes. The code also revises the rules on retrenchments and will require employers with 300 or more workers (up from 100) to obtain prior permission from labor authorities before making layoffs. A new worker reskilling fund will pay a benefit to retrenched workers.
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Phase 1a: Analysis and Implications
Code on Wages and Social Security Code
1. Review of existing compensation structure, policies and practices
2. Regulatory requirements under local law and regulations
3. Financial & Cost implications
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Phase 1b: Analysis and Implications
Occupational Safety and Industrial Relations Code
1. Analyze & review current policies and process
2. Recommend changes to ensure compliance to various provisions.
3. Brainstorm and finalize the suggestions
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Phase 2: Governance Framework & Checklist
1. Advise a governance framework to be in accordance with legal and regulatory requirements including policies and processes
2. Provide State wise compliance checklist, once final rules are notified.
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Phase 3: Change Communication
1. Design Communication plan
2. Get feedback from company HR, Legal and Finance.
3. Deliver the collaterals as per communication plan (Employee FAQs & Communication deck)
4. Conduct sessions with key stakeholder / leadership team and HR team