India postpones implementation of new labour codes
This is due to several state governments not having finalised the relevant rules. A senior labour ministry official has been cited as saying that the “implementation of labour codes looks unlikely from April 1. The government wants at least some industrial states to notify rules across four labour codes along with the Centre to avoid any legal void”.
Although the ministry had earlier announced that the implementation of the central laws will not be contingent on states making their rules, a senior ministry official has said “we would like to have some major states [to be] ready at least”.
Key states such as Uttar Pradesh, Bihar, Madhya Pradesh, Haryana and Uttarakhand have only circulated the draft rules for two codes, while Karnataka has circulated draft rules for one code. Jammu and Kashmir is the only state that has finalised its rules so far.
The postponement of the implementation will give companies more time in reworking the salary structures of their employees and other related human-resource policies as the code on wages is one of the four laws.
The new code caps allowances at 50% of an employee’s basic income and provides for provident fund contribution as a prescribed proportion of 50% of gross pay. The new laws are expected to increase employee costs for companies.
However, the delay will negatively impact migrant workers and gig workers, including workers engaged with platforms like Ola and Uber, who will now have to wait longer to receive benefits due to them under the new law.
The labour ministry had initially planned to implement the four labour codes – on industrial relations, wages, social security and and occupational health safety and working conditions – from April 1, according to Times of India.