India To Implement Labour Codes In Phases From 2025

(MENAFN- KNN India) New Delhi, Feb 5 (KNN) The government of India is set to roll out the much-anticipated Labour Codes in a phased manner starting in 2025.

This structured implementation aims to ensure a smooth transition for businesses while maintaining compliance with new regulations.

The Labour Codes consolidate 29 existing labour laws into four key legislations focusing on wages, industrial relations, social security, and occupational safety.

This overhaul is expected to modernize and streamline labour regulations across industries. To allow businesses sufficient time to adapt, the implementation will be carried out in three phases.

In the first phase, large enterprises with over 500 employees will be required to comply immediately upon enforcement.

These companies will need to restructure HR policies, update payroll systems, and align benefits with the new regulations. Given their resources, large firms are expected to integrate these changes relatively quickly.

The second phase will cover medium-sized enterprises with 100 to 500 employees. These businesses will receive a transition period following the initial enforcement, allowing them to gradually adapt to the revised wage structures, work policies, and employment contracts.

Labour unions and dispute resolution mechanisms will also undergo changes to align with the new framework.

Small enterprises with fewer than 100 employees will have the longest transition window-up to two years-to implement the necessary adjustments.

Given their limited resources, these businesses may require government support or professional advisory services to ensure compliance.

Some of the key changes introduced by the Labour Codes include a uniform wage structure across sectors, revised working hours, and new overtime rules.

Dispute resolution mechanisms will be streamlined, and businesses will experience greater flexibility in hiring and retrenchment.

Additionally, social security benefits, including Provident Fund (PF), Employee State Insurance (ESI), and gratuity, will now extend to gig and platform workers.

Occupational safety regulations will also be reinforced, particularly for hazardous industries, with mandatory health checkups.

Currently, the Labour Ministry is working closely with state governments to finalize the rules.

However, some states, including West Bengal and Delhi, are yet to complete their processes. Nationwide enforcement is expected once all states align with the central framework.

Despite the structured rollout, several challenges remain. Will MSMEs receive exemptions or financial support? How will compliance be monitored and enforced? Will wage restructuring affect employees' take-home salaries? These questions remain open as stakeholders await further clarifications.

Employers must take proactive steps to ensure compliance. Large companies should implement changes immediately, upgrading HR and payroll systems.

Medium enterprises should begin restructuring salaries and work policies, while small businesses should track updates and prepare for compliance within the given timeframe. As India embarks on this significant labour reform journey, businesses must stay informed and prepared to navigate the evolving regulatory landscape.

(KNN Bureau)

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