The 4 labour codes, consolidates 29 central laws, aim to simplify labour regulatory framework.

Labour codes and associate key issues

• Code on Wages, 2019 : Sets minimum wages to all workers.
  • Too low wage can cause wage suppression. Eg. Noida protests or job cuts.
• Code on Social Security, 2020 : Expands Social security to unorganized workers, defines Gig workers etc.
  • Lack of Universal Coverage: Due to size thresholds for coverage. Eg. 20 for EPFO and 10 for ESIC 
  • Issues Faced by GIG workers 
    • Opaque algorithms: Ratings, pay without transparency, limiting workers’ ability to challenge penalties or changes.
    • Precarious Earnings which do not account for fuel costs, or loss of incentive for rejected order.
• Occupational Safety, Health, and Working Conditions Code, 2020: Improves workplace safety, health, and working conditions
  • Disproportionate burden: Small/Medium enterprises face heavier compliance burdens than large firms, offsetting gains.
• Industrial Relations Code, 2020: Regulates Unions, disputes, employment conditions.
  • Dwarf Firms: Threshold-based rules incentivise firms to stay small, reducing productivity e.g. minimum 300 workers needed for prior government approval for layoff, retrenchment or closure.
• Weak enforcement: Informal sector comprises more than 90% of workforce where these codes are hardest to monitor.