{"id":14276,"date":"2025-12-18T14:28:58","date_gmt":"2025-12-18T08:58:58","guid":{"rendered":"https:\/\/theeducationoverview.in\/?p=14276"},"modified":"2025-12-18T14:28:58","modified_gmt":"2025-12-18T08:58:58","slug":"new-labour-codes-modernizing-indias-msme-ecosystem","status":"publish","type":"post","link":"https:\/\/theeducationoverview.in\/?p=14276","title":{"rendered":"New Labour Codes Modernizing India\u2019s MSME Ecosystem"},"content":{"rendered":"<h2 style=\"font-weight: 500; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>New Labour Codes Modernizing India\u2019s MSME Ecosystem<\/strong><\/span><\/h2>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>Posted On: 05 DEC 2025 2:45PM by PIB Delhi<\/strong><\/span><\/p>\n<table>\n<tbody>\n<tr>\n<td><span style=\"color: #3366ff;\"><strong>Key Takeaways<\/strong><\/span><\/p>\n<ul>\n<li><span style=\"color: #3366ff;\"><strong>New Labour Codes simplify compliance for MSMEs\u00a0through faster approvals, digital processes, and reduced regulatory burden.<\/strong><\/span><\/li>\n<li><span style=\"color: #3366ff;\"><strong>Uniform national standards and a facilitative inspection system strengthen ease of doing business\u00a0while ensuring safer, more equitable workplaces across India.<\/strong><\/span><\/li>\n<li><span style=\"color: #3366ff;\"><strong>Higher operational thresholds\u00a0and\u00a0flexible employment\u00a0provisions\u00a0give MSMEs the agility to adapt quickly to changing business conditions.<\/strong><\/span><\/li>\n<li><span style=\"color: #3366ff;\"><strong>Comprehensive wage, social security, and welfare reforms\u00a0extend protection and dignity to all workers.<\/strong><\/span><\/li>\n<\/ul>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p style=\"font-weight: 400; text-align: justify;\">\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>Introduction<\/strong><\/span><\/p>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>The\u00a0Micro, Small and Medium Enterprises (MSME) sector is the backbone of India\u2019s economy, accounting for a substantial\u00a030.1% of the country\u2019s GDP, 35.4% of manufacturing output, and 45.73% of overall exports. The sector provides\u00a0employment to nearly 28 crore\u00a0people across\u00a06.5 crore units. This scale, reach, and diversity make it one of the most crucial\u00a0engines of development and economic resilience.<\/strong><\/span><\/p>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>Given the central role of MSMEs, continued policy support remains essential to\u00a0promote competitiveness and consistent growth.\u00a0Further to strengthen this sector, the Labour Codes implemented by the Government, seek to\u00a0modernize India\u2019s labour ecosystem by formalizing employment, simplifying compliance through digital integration, strengthening social security and ensuring workplace safety and equality.<\/strong><\/span><\/p>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>MSMEs in India: The Scale and Classification<\/strong><\/span><\/p>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>MSMEs are complementary to large industries as ancillary units and contribute significantly in the inclusive industrial development of the country. They are classified on the basis of investment in plant and machinery and annual turnover:<\/strong><\/span><\/p>\n<table>\n<tbody>\n<tr>\n<td><span style=\"color: #3366ff;\"><strong>Classification<\/strong><\/span><\/td>\n<td><span style=\"color: #3366ff;\"><strong>Investment in Plant &amp; Machinery<\/strong><\/span><\/td>\n<td><span style=\"color: #3366ff;\"><strong>Annual Turnover<\/strong><\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"color: #3366ff;\"><strong>Micro<\/strong><\/span><\/td>\n<td><span style=\"color: #3366ff;\"><strong>Not more than Rs. 2.5 crores<\/strong><\/span><\/td>\n<td><span style=\"color: #3366ff;\"><strong>Not more than Rs. 10 crores<\/strong><\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"color: #3366ff;\"><strong>Small<\/strong><\/span><\/td>\n<td><span style=\"color: #3366ff;\"><strong>Not more than Rs. 25 crores<\/strong><\/span><\/td>\n<td><span style=\"color: #3366ff;\"><strong>Not more than Rs. 100 crores<\/strong><\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"color: #3366ff;\"><strong>Medium<\/strong><\/span><\/td>\n<td><span style=\"color: #3366ff;\"><strong>Not more than Rs. 125 crores<\/strong><\/span><\/td>\n<td><span style=\"color: #3366ff;\"><strong>Not more than Rs. 500 crores<\/strong><\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>Covering the wide spectrum of firms,\u00a0the sector stands to benefit significantly from the clear and consistent provisions brought in by the new Labour Codes.<\/strong><\/span><\/p>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>Labour Codes and Ease of Doing Business for MSMEs<\/strong><\/span><\/p>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>One of the central aims of the Labour Codes is to simplify and streamline regulatory processes that often overwhelm MSMEs. The reforms address long-standing bottlenecks through\u00a0rationalised thresholds, digitised paperwork, predictable timelines, and reduced inspections.<\/strong><\/span><\/p>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>Streamlined Factory Licensing and Faster Approvals<\/strong><\/span><\/p>\n<ul style=\"font-weight: 400; text-align: justify;\">\n<li><span style=\"color: #3366ff;\"><strong>The\u00a0threshold to obtain a factory license has been increased: a) From 10 to 20 workers (with power) and b) From 20 to 40 workers (without power)<\/strong><\/span><\/li>\n<li><span style=\"color: #3366ff;\"><strong>A\u00a030-day time limit has been prescribed for granting permission for construction or expansion\u00a0of a factory, with the provision for deemed permission.<\/strong><\/span><\/li>\n<li><span style=\"color: #3366ff;\"><strong>The\u00a0site appraisal committee must give its recommendations\u00a0for the initial location or expansion of factories involving hazardous processes\u00a0within 30 days. This will facilitate quicker setup and expansion of MSME factories by cutting approval delays.<\/strong><\/span><\/li>\n<\/ul>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\"><span style=\"color: #3366ff;\"><strong>Theoverall approval timeline has been reduced from 90 days to 30 days.<\/strong><\/span><\/li>\n<\/ul>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>These measures drastically cut approval delays and enable MSMEs to establish and scale operations faster.<\/strong><\/span><\/p>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>Simplified Rules for Contract Labour<\/strong><\/span><\/p>\n<ul style=\"font-weight: 400; text-align: justify;\">\n<li><span style=\"color: #3366ff;\"><strong>The threshold for applicability of the provisions relating to contract labour license has been\u00a0increased from 20 to 50 workers.<\/strong><\/span><\/li>\n<li><span style=\"color: #3366ff;\"><strong>Now,\u00a0contractors employing fewer than 50 workers do not need a license.<\/strong><\/span><\/li>\n<\/ul>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>This will reduce excessive regulation for smaller establishments and reduce compliance burden on MSMEs.<\/strong><\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #3366ff;\"><strong>\u00a0Single Registration, Single Return, Single License<\/strong><\/span><\/p>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>The Codes introduce\u00a0electronic single registration, a single return, and single all-India licences valid for five years\u00a0as well as deemed approvals.<\/strong><\/span><\/p>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>Such provisions in the Codes will\u00a0promote both ease of living and ease of doing business, simplify compliance, reduce procedural delays, lower administrative cost. This is\u00a0specifically beneficial for the MSME sector\u00a0that finds it difficult to manage compliance.<\/strong><\/span><\/p>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>Uniform National Standards &amp; National Board<\/strong><\/span><\/p>\n<ul style=\"font-weight: 400; text-align: justify;\">\n<li><span style=\"color: #3366ff;\"><strong>In place of six boards under the existing laws, there will be\u00a0a single national tripartite board\u00a0to advise the Central Government on standards, regulations, etc under the Codes.<\/strong><\/span><\/li>\n<li><span style=\"color: #3366ff;\"><strong>The\u00a0Government will notify standards on occupational safety and health for MSME\u00a0workplaces across India. This will replace the current situation where different states have framed different standards for the same industries.<\/strong><\/span><\/li>\n<\/ul>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>This will\u00a0bring uniformity of standards across the country\u00a0which will eliminate state-wise variation, promote fairness, predictability, and simpler compliance for MSMEs operating in multiple states.<\/strong><\/span><\/p>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>Higher Thresholds for Operational Flexibility<\/strong><\/span><\/p>\n<ul style=\"font-weight: 400; text-align: justify;\">\n<li><span style=\"color: #3366ff;\"><strong>The\u00a0threshold for lay-off, retrenchment, and closure has increased to 300 workers.\u00a0This allows smaller industrial establishments employing fewer than 300 workers to restructure operations based on their requirements without needing complex government approvals.<\/strong><\/span><\/li>\n<li><span style=\"color: #3366ff;\"><strong>The\u00a0threshold for applicability of Standing Orders has increased from 100 to 300 or more workers.\u00a0Establishments with fewer than 300 workers are now exempt from the requirement of certification of standing orders.<\/strong><\/span><\/li>\n<\/ul>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>MSMEs can now\u00a0adapt more quickly to changing economic conditions. This flexibility reduce compliance burden, promotes business growth, job creation, and sustainability of small and medium enterprises while\u00a0maintaining a balance between regulation and operational freedom.<\/strong><\/span><\/p>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>Third-Party Audits and the Inspector-Cum-Facilitator Model<\/strong><\/span><\/p>\n<ul style=\"font-weight: 400; text-align: justify;\">\n<li><span style=\"color: #3366ff;\"><strong>Provision has been made for third-party audit and certification of start-up establishments\u00a0or specific classes of establishments, helping them assess and improve health and safety without intervention of the Inspector-cum-Facilitator.<\/strong><\/span><\/li>\n<li><span style=\"color: #3366ff;\"><strong>Inspector-cum-Facilitators will function in place of traditional inspectors, and inspections will be conducted through a randomized, web-based system aimed at reducing the traditional \u201cinspector raj\u201d.<\/strong><\/span><\/li>\n<\/ul>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>These changes\u00a0promote a more harmonious environment\u00a0by making inspections facilitative rather than intrusive and burdensome. This\u00a0helps establishments comply with the law, raise awareness amongst the workers, and support\u00a0greater ease of doing business.<\/strong><\/span><\/p>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>Decriminalisation of Offences and Compounding<\/strong><\/span><\/p>\n<ul style=\"font-weight: 400; text-align: justify;\">\n<li><span style=\"color: #3366ff;\"><strong>First-time offences punishable with fine\u00a0only shall be compoundable by\u00a0paying 50%\u00a0of the maximum fine.<\/strong><\/span><\/li>\n<li><span style=\"color: #3366ff;\"><strong>Offences punishable with fine or imprisonment, or with both, shall be compoundable by\u00a0paying 75%\u00a0of the maximum fine.<\/strong><\/span><\/li>\n<li><span style=\"color: #3366ff;\"><strong>Criminal penalties such as imprisonment are replaced with civil penalties\u00a0like monetary fines.<\/strong><\/span><\/li>\n<li><span style=\"color: #3366ff;\"><strong>Employers will be given a\u00a0mandatory 30-days&#8217; notice for compliance\u00a0before taking any legal action.<\/strong><\/span><\/li>\n<li><span style=\"color: #3366ff;\"><strong>Several offences have been decriminalized, replacing criminal penalties with fines.<\/strong><\/span><\/li>\n<\/ul>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>These provisions make the law less punitive and more compliance-oriented.\u00a0Employers can avoid prolonged litigation by paying the prescribed penalty, enabling quicker resolution of issues. The provisions lower compliance risk for small firms, promote voluntary compliance, reduce fear of prosecution, and make enforcement more facilitative for MSMEs.<\/strong><\/span><\/p>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>Reduced Paperwork and Electronic Record-Keeping<\/strong><\/span><\/p>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>There is a\u00a0drastic reduction in the number of registers to be maintained. The new provisions\u00a0promote digitization of records, allowing all registers and documents to be maintained electronically. This aligns with the digital-first approach reducing paperwork and administrative burden.<\/strong><\/span><\/p>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>Social Security and EPF Reforms for MSMEs<\/strong><\/span><\/p>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>The Labour Codes modernise the social security landscape, making compliance simpler and more predictable.<\/strong><\/span><\/p>\n<ul style=\"font-weight: 400; text-align: justify;\">\n<li><span style=\"color: #3366ff;\"><strong>Under the Social Security Code, 2020, a\u00a05-year time limit is set for initiating inquiries by Employee Provident Fund (EPF) authorities.\u00a0Such inquiries must be completed within 2 years, extendable by 1 year with CPFC approval.<\/strong><\/span><\/li>\n<li><span style=\"color: #3366ff;\"><strong>The earlier power to reopen cases on a suo moto basis under the\u00a0Employees&#8217; Provident Funds and Miscellaneous Provisions Act, 1952 has been abolished.<\/strong><\/span><\/li>\n<li><span style=\"color: #3366ff;\"><strong>The\u00a0deposit amount for filing an appeal before the Employees\u2019 Provident Fund Organisation (EPFO) Tribunal has been reduced to 25%\u00a0of the awarded amount, instead of the earlier 40% to 70%.<\/strong><\/span><\/li>\n<li><span style=\"color: #3366ff;\"><strong>Self-assessment of cess\u00a0allows employers to assess construction costs themselves and pay the applicable cess.<\/strong><\/span><\/li>\n<\/ul>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>These provisions ensure timely action, provide legal certainty, and reduce the compliance burden on employers. The reduced deposit requirement lowers the financial burden on employers before filing an appeal. Self-assessment also simplifies the process and promotes timely compliance in construction-related works.<\/strong><\/span><\/p>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>Flexibility in Employment Practices<\/strong><\/span><\/p>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>Fixed-Term Employment (FTE)<\/strong><\/span><\/p>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>Fixed-term employment can benefit the employers in following ways:<\/strong><\/span><\/p>\n<ul style=\"font-weight: 400; text-align: justify;\">\n<li><span style=\"color: #3366ff;\"><strong>Flexibility in Hiring:\u00a0MSMEs can hire workers for seasonal or project-based needs without committing to long-term employment,\u00a0helping them stay agile in fluctuating market conditions.<\/strong><\/span><\/li>\n<li><span style=\"color: #3366ff;\"><strong>Reduced Compliance Burden:\u00a0FTE\u00a0allows natural expiry of employment\u00a0at contract end, reducing disputes or procedural burdens related to retrenchment or layoffs.<\/strong><\/span><\/li>\n<li><span style=\"color: #3366ff;\"><strong>Cost Efficiency:\u00a0MSMEs\u00a0can control overheads during low-demand periods\u00a0since FTE workers are hired only when required.<\/strong><\/span><\/li>\n<li><span style=\"color: #3366ff;\"><strong>Encourages Formalisation:\u00a0Many MSMEs rely on casual or informal labour. FTE converts such engagement into\u00a0formal employment with legal benefits, improving compliance and transparency.<\/strong><\/span><\/li>\n<li><span style=\"color: #3366ff;\"><strong>Access to Skilled Labour:\u00a0MSMEs\u00a0can hire skilled professionals for specific projects\u00a0without long-term liability, improving productivity and innovation.<\/strong><\/span><\/li>\n<\/ul>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>Regulation of Strikes<\/strong><\/span><\/p>\n<ul style=\"font-weight: 400; text-align: justify;\">\n<li><span style=\"color: #3366ff;\"><strong>The\u00a0definition of strike now includes concerted casual leave taken by more than fifty percent of the workers on a given day,\u00a0thereby prohibiting flash strikes and preventing loss of man days or work.<\/strong><\/span><\/li>\n<li><span style=\"color: #3366ff;\"><strong>Strikes require 14 days\u2019 notice\u00a0and are restricted during conciliation or tribunal proceedings.<\/strong><\/span><\/li>\n<li><span style=\"color: #3366ff;\"><strong>Mandatory conciliation is introduced\u00a0as part of the process.<\/strong><\/span><\/li>\n<\/ul>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>These provisions\u00a0prevent sudden disruptions, reduce loss of productivity, and give employers confidence to expand operations\u00a0and hire more workers, knowing productivity will be stable.<\/strong><\/span><\/p>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>Flexible Working Hours and Overtime<\/strong><\/span><\/p>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>The appropriate Governments (Central\/State) now have\u00a0full flexibility to fix working-hour limits, replacing the earlier uniform cap of 75 overtime hours per quarter.<\/strong><\/span><\/p>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>This flexibility in hours of work\u00a0will enable industry to fix the hours of work as per the business needs\u00a0including when they get peak orders. It will also\u00a0generate growth and employment.<\/strong><\/span><\/p>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>Protection of Employer Assets<\/strong><\/span><\/p>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>Any amount an employer deposits with the appropriate Government (Central\/State) to secure the performance of a contract, as well as any amount the Government owes the employer for that contract, cannot be attached by any court in order for debts or liabilities incurred by the employer. The only exception is when the employer owes dues to employees working on that specific contract.<\/strong><\/span><\/p>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>Hence,\u00a0amounts deposited with Government to secure contract performance are protected from attachment except for dues owed to employees.<\/strong><\/span><\/p>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>Worker-Centric Reforms Enhancing Welfare and Dignity<\/strong><\/span><\/p>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>Wage, Social Security and Welfare Provision<\/strong><\/span><\/p>\n<ul style=\"font-weight: 400; text-align: justify;\">\n<li><span style=\"color: #3366ff;\"><strong>Universalisation of Minimum Wages:\u00a0No employer shall pay any employee less than the minimum wage notified by the Government.\u00a0Minimum wages, earlier applicable only to scheduled employments, now cover all employees and\u00a0must be reviewed or revised at intervals not exceeding five years.<\/strong><\/span><\/li>\n<\/ul>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>Minimum rates of wages shall be\u00a0fixed for time work and piece work, based on hourly, daily, or monthly wage periods, taking into account the skill of the employee and the arduousness of the work.<\/strong><\/span><\/p>\n<ul style=\"font-weight: 400; text-align: justify;\">\n<li><span style=\"color: #3366ff;\"><strong>Floor Wage: A floor wage will be fixed and regularly revised by the Government\u00a0considering minimum living standards, including food and clothing. This will reduce migration of labour from one state to another due to varying wage levels.<\/strong><\/span><\/li>\n<li><span style=\"color: #3366ff;\"><strong>Overtime Wages:\u00a0Employers must\u00a0pay employees twice the normal wage rate\u00a0for any work beyond normal working hours.<\/strong><\/span><\/li>\n<li><span style=\"color: #3366ff;\"><strong>Time Limits for Payment of Wages:\u00a0The employer shall pay or cause to be paid wages to all the employees, based on prescribed timelines:<\/strong><\/span><\/li>\n<\/ul>\n<table>\n<tbody>\n<tr>\n<td><span style=\"color: #3366ff;\"><strong>Sl.<\/strong><\/span><\/td>\n<td><span style=\"color: #3366ff;\"><strong>Type of Employee<\/strong><\/span><\/td>\n<td><span style=\"color: #3366ff;\"><strong>Time Limit for Payment of Wages<\/strong><\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"color: #3366ff;\"><strong>1.<\/strong><\/span><\/td>\n<td><span style=\"color: #3366ff;\"><strong>Daily-wage employee<\/strong><\/span><\/td>\n<td><span style=\"color: #3366ff;\"><strong>End of the shift<\/strong><\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"color: #3366ff;\"><strong>2.<\/strong><\/span><\/td>\n<td><span style=\"color: #3366ff;\"><strong>Weekly-rated employee<\/strong><\/span><\/td>\n<td><span style=\"color: #3366ff;\"><strong>Before the weekly holiday<\/strong><\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"color: #3366ff;\"><strong>3.<\/strong><\/span><\/td>\n<td><span style=\"color: #3366ff;\"><strong>Fortnightly-rated employee<\/strong><\/span><\/td>\n<td><span style=\"color: #3366ff;\"><strong>Within 2 days of the end of the fortnight<\/strong><\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"color: #3366ff;\"><strong>4.<\/strong><\/span><\/td>\n<td><span style=\"color: #3366ff;\"><strong>Monthly-rated employee<\/strong><\/span><\/td>\n<td><span style=\"color: #3366ff;\"><strong>Within 7 days of the next month<\/strong><\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"color: #3366ff;\"><strong>5.<\/strong><\/span><\/td>\n<td><span style=\"color: #3366ff;\"><strong>On termination or resignation<\/strong><\/span><\/td>\n<td><span style=\"color: #3366ff;\"><strong>Within 2 working days<\/strong><\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<ul style=\"font-weight: 400; text-align: justify;\">\n<li><span style=\"color: #3366ff;\"><strong>Provisions on timely payment and unauthorised deductions, earlier applicable only to employees earning up to \u20b924,000 per month,\u00a0now apply to all employees.<\/strong><\/span><\/li>\n<\/ul>\n<p style=\"font-weight: 400; text-align: justify;\">\n<ul style=\"font-weight: 400; text-align: justify;\">\n<li><span style=\"color: #3366ff;\"><strong>Limitation Period:\u00a0The\u00a0period for filing claims by an employee has been extended to three years, instead of the earlier six months to two years.<\/strong><\/span><\/li>\n<li><span style=\"color: #3366ff;\"><strong>Bonus:\u00a0Bonus shall be paid to every employee drawing wages within the limit fixed by the appropriate Government (Central\/State).<\/strong><\/span>\n<ul>\n<li><span style=\"color: #3366ff;\"><strong>Eligible employees must have worked at least 30 days\u00a0in an accounting year.<\/strong><\/span><\/li>\n<li><span style=\"color: #3366ff;\"><strong>The\u00a0annual bonus shall be paid at a minimum of 8.33% and a maximum of 20%\u00a0of the wages earned.<\/strong><\/span><\/li>\n<\/ul>\n<\/li>\n<li><span style=\"color: #3366ff;\"><strong>Prohibition of Gender Discrimination:\u00a0Employers shall not discriminate based on gender, including transgender persons, in recruitment, wages, or conditions of employment for the same or similar work.<\/strong><\/span><\/li>\n<li><span style=\"color: #3366ff;\"><strong>Commuting Accidents Covered:\u00a0The scope of\u00a0employee compensation now includes accidents occurring during commuting, from his residence to the place of employment, or returning from place of his employment to his residence after performing duty.<\/strong><\/span><\/li>\n<li><span style=\"color: #3366ff;\"><strong>ESIC Coverage Expansion:\u00a0ESIC coverage extended pan-India;\u00a0the earlier concept of notified areas has been removed.\u00a0Voluntary membership\u00a0introduced for establishments with fewer than 10 persons through employer and employee joint consensus.<\/strong><\/span><\/li>\n<li><span style=\"color: #3366ff;\"><strong>Expansion of Family Definition:\u00a0In case of a female employee, the definition of family has been extended to include parents-in-laws\u00a0(father-in-law and mother-in-law), based on income levels prescribed by the Government.<\/strong><\/span><\/li>\n<li><span style=\"color: #3366ff;\"><strong>Formalisation Through Appointment Letters:\u00a0Every employee must be given an\u00a0appointment letter\u00a0in the prescribed format detailing designation, category, wages, and social-security information.<\/strong><\/span><\/li>\n<li><span style=\"color: #3366ff;\"><strong>Free Annual Health Check-Ups:\u00a0Every employee is eligible for free annual health check-ups.<\/strong><\/span><\/li>\n<li><span style=\"color: #3366ff;\"><strong>Annual Leave with Wages:\u00a0Workers are entitled to\u00a0paid leave on working for 180 days or more in a calendar year\u00a0(reduced from 240 days).<\/strong><\/span><\/li>\n<li><span style=\"color: #3366ff;\"><strong>Inter-State Migrant Worker:\u00a0The\u00a0definition of Inter State Migrant Workmen has been widened\u00a0to include those employed directly or through contractor and also covers workers who migrate on their own.<\/strong><\/span><\/li>\n<li><span style=\"color: #3366ff;\"><strong>Health, Safety and Welfare Facilities:\u00a0The Government will prescribe\u00a0uniform provisions for cleanliness, drinking water, toilets, rest rooms\u00a0in factory mines employing 50 or more workers, canteens in the establishments employing 100 or more workers including contract labour.<\/strong><\/span><\/li>\n<li><span style=\"color: #3366ff;\"><strong>Worker Re-Skilling Fund:\u00a0In case of any retrenchment of a worker by an employer, the employer will need to contribute equivalent to 15 days\u2019 last drawn wages of the retrenched worker to the worker re-skilling fund within 45 days of retrenchment.<\/strong><\/span><\/li>\n<\/ul>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>These provisions\u00a0strengthen wage protection, ensure timely payments, and extend the coverage of minimum wages and bonus\u00a0to a wider group of employees. Workers receive expanded social security and health and welfare benefits.\u00a0Anti-discrimination measures uphold gender equality in employment, and the worker re-skilling fund provides financial support during transitions after retrenchment.<\/strong><\/span><\/p>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>Fixed Term Employment Benefits<\/strong><\/span><\/p>\n<ul style=\"font-weight: 400; text-align: justify;\">\n<li><span style=\"color: #3366ff;\"><strong>Equal Benefits:\u00a0FTE workers are entitled to wages, hours of work, allowances, leave, and social security benefits at par with regular employees doing similar work<\/strong><\/span><\/li>\n<li><span style=\"color: #3366ff;\"><strong>Job Formalisation:\u00a0FTE replaces informal, insecure jobs with formal contracts, ensuring legal rights and benefits such as PF, ESI, and bonus.<\/strong><\/span><\/li>\n<li><span style=\"color: #3366ff;\"><strong>Skill Enhancement:\u00a0Working under multiple contracts across sectors helps workers gain varied skills and experience.<\/strong><\/span><\/li>\n<li><span style=\"color: #3366ff;\"><strong>Predictable Tenure:\u00a0Workers know their employment duration, salary, and conditions upfront, reducing exploitation and uncertainty.<\/strong><\/span><\/li>\n<li><span style=\"color: #3366ff;\"><strong>Potential for Renewal or Absorption:\u00a0Good performance in FTE roles may often lead to absorption in regular employment and help fulfil their aspirations to work in large, organised industries for better wages, working conditions, and prestige.<\/strong><\/span><\/li>\n<\/ul>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>These provisions give workers equal benefits, formal contracts, skill growth, predictable tenure, and potential absorption into regular employment with better conditions.<\/strong><\/span><\/p>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>Conclusion<\/strong><\/span><\/p>\n<p style=\"font-weight: 400; text-align: justify;\"><span style=\"color: #3366ff;\"><strong>The Labour Codes collectively represent one of the most significant reforms\u00a0in India\u2019s labour governance framework. By simplifying compliance, encouraging digital processes, promoting voluntary adherence, and expanding social security,\u00a0the Codes create a balanced environment where MSMEs can grow more easily while workers benefit from fair wages, dignity, and protection.\u00a0India\u2019s MSME ecosystem will strengthen under these new Codes, aligning with the principles of\u00a0\u201cSabka Saath, Sabka Vikas\u201d\u00a0and contributing to the vision of\u00a0Viksit Bharat by 2047\u00a0and ensuring that the benefits of development reach every worker and entrepreneur.<\/strong><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>New Labour Codes Modernizing India\u2019s MSME Ecosystem Posted On: 05 DEC 2025 2:45PM by PIB Delhi Key Takeaways New Labour Codes simplify compliance for MSMEs\u00a0through faster approvals, digital processes, and reduced regulatory burden. Uniform national standards and a facilitative inspection system strengthen ease of doing business\u00a0while ensuring safer, more equitable workplaces across India. Higher operational &hellip;<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-14276","post","type-post","status-publish","format-standard","hentry","category-education-news"],"_links":{"self":[{"href":"https:\/\/theeducationoverview.in\/index.php?rest_route=\/wp\/v2\/posts\/14276","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/theeducationoverview.in\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/theeducationoverview.in\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/theeducationoverview.in\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/theeducationoverview.in\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=14276"}],"version-history":[{"count":1,"href":"https:\/\/theeducationoverview.in\/index.php?rest_route=\/wp\/v2\/posts\/14276\/revisions"}],"predecessor-version":[{"id":14278,"href":"https:\/\/theeducationoverview.in\/index.php?rest_route=\/wp\/v2\/posts\/14276\/revisions\/14278"}],"wp:attachment":[{"href":"https:\/\/theeducationoverview.in\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=14276"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/theeducationoverview.in\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=14276"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/theeducationoverview.in\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=14276"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}