India Moves Closer to Labour Code Implementation With Wage, IR Rules Notified

The Centre on May 7 notified the final rules under the Industrial Relations (IR) Code, 2020 and the Code on Wages, 2019, marking another step towards operationalising the four labour codes that were passed by Parliament in 2019 and 2020 but are yet to be fully implemented across the country.

According to Business Standard, the labour ministry also notified the Model Standing Orders, 2026, for the mining, manufacturing and services sectors.

The final rules come after the ministry published draft versions in December 2025 and invited stakeholder comments. The government said objections and suggestions received on the draft rules had been considered before finalisation.

Central Rules Applicability

Puneet Gupta, partner, People Advisory Services-Tax, at EY India, told Business Standard that the notification of Central Rules under the Industrial Relations Code and the Code on Wages marked an important step in moving the labour codes from policy to implementation.

However, he noted that these Central Rules would largely apply to establishments where the Central Government is the “appropriate government”, including telecom, banking and insurance, mines, oilfields, major ports, air transport, as well as central public sector undertakings and their contractors. Gupta added that the final central rules were also likely to become the basis for states to finalise their own rules under the labour codes.

Digital Compliance Push

The rules under the Wage Code provide for norms for fixation and revision of minimum wages and variable dearness allowance (VDA). The VDA will be revised twice a year based on the consumer price index for industrial workers. The rules make the eight hour workday and 48 hour weekly limit mandatory, mandate weekly rest days with overtime for work on rest days and formalise digital compliance by allowing electronic maintenance of registers, wage slips, claims and notices. Employers are also required to maintain wage, overtime and attendance records for five years.

Wage Code rules provide “more clarity and structure in core areas” – Gupta including setting minimum wages, limiting normal working hours to 48 hours a week and laying down processes for payroll-related aspects including deductions.

India’s Labour Reforms

Between 2019 and 2020, Parliament passed four labour codes to replace 29 existing central labour laws with simplified frameworks for wages, industrial relations, social security and occupational safety. The reforms were intended to improve ease of doing business and labour compliance but implementation has been delayed as states are yet to finalise rules.