The government has implemented four Labour Codes, which modernise and consolidate existing labour laws, impacting millions of workers by expanding Provident Fund and social security coverage.
In a landmark move, the government on Friday implemented the four Labour Codes pending since 2020. One of the biggest impacts of these codes will be seen in Provident Fund (PF), Employees’ State Insurance (ESIC), and social security coverage, which now extend to millions of workers who were previously excluded.
The four Labour Codes now in force are: Wages, Industrial Relations, Social Security, and Occupational Safety & Health. Together, they replace 29 older laws with a modern, consolidated framework.
The new codes introduce worker-friendly measures such as timely minimum wages for all and universal social security, including gig and platform workers.
At the same time, the framework allows longer work hours, wider fixed-term employment, and employer-friendly retrenchment rules.
- Every worker including gig, platform, contract, and migrant workers will now get social security benefits, which were earlier fragmented.
- A single Aadhaar-linked Universal Account Number will make PF and benefits portable across jobs and states.
- Aggregator platforms like cab and delivery apps must contribute a small share of turnover to a social security fund for gig workers.
- This ensures retirement savings, health insurance, accident cover, and maternity benefits reach workers outside traditional salaried jobs.
- According to the new codes, PF benefits have been extended to fixed-term, contract, and temporary workers.
- Fixed-term employees can now claim gratuity after just one year, compared to five years earlier.
- Employers will benefit from a uniform PF framework across states, reducing compliance confusion.
ESIC Coverage Expands Nationwide
- As per the new codes, the ESIC benefits will now be available across India, not just in select areas.
- Small firms with fewer than 10 workers can opt in voluntarily.
- ESIC coverage is mandatory for any workplace with hazardous processes.
- Medical facilities will be extended to plantation, mine, beedi, dock, and rural workers.
What’s New in Formalisation for Worker Welfare
- In the new codes, employers must issue appointment letters to all workers, essential for PF and ESIC registration.
- Free annual health check-ups will be provided for workers aged 40 plus.
- Women workers can take night shifts with consent and safety measures.
- Contract workers will receive PF, ESIC, and health benefits, with the principal employer responsible.