The central and state governments of India regulate and initiate new labor law reforms for the labor class. These laws ensure that fundamental rights are provided to all workers, focusing especially on equal treatment and decent working conditions. These laws are essential to facilitate doing business and to create more employment opportunities for the massive workforce in India.

The Indian labor law falls under the Concurrent List, which means they are created by both central and state governments. There are currently about 100 State laws and 40 Central laws. Due to the mismanagement of these labor laws and mistreatment in the work sector, labor law reforms were made to reinstate equality and improve working conditions.

The Ministry of Labor and Employment has taken several measures to improve work conditions and help improve standards of living. This will help to increase work output and the overall efficiency of the industrial and business sectors.

There are 4 Labor and Industrial codes passed by the government, including the Code on Wages, Occupational Safety, Heath, and Working Conditions, Social Security, and Industrial Relations. The labor codes claim to be transparent, simplified, and easy to understand for the entire workforce and are being celebrated as a significant step for labor reform in India. They aim to achieve fair and transparent enforcement of labor laws with accountability and to eliminate discrimination. The codes emphasize and promote ease of doing business in India.

Why Initiate Labor Reforms?
Many laws that were in place can be traced back to the time of the British Raj. These laws had become extremely outdated and irrelevant for the workforce today. Rather than protecting the rights of the labor class, these provisions were making working conditions more difficult. According to the previous legislation, if a worker had to claim any benefit, they would have to fill out four forms. Now 29 new labor laws have been incorporated into the new labor code categories.

Who Will Benefit from the new Labor Codes?
These laws are applicable to both organized and unorganized sectors in the workforce. According to these new laws, provident funds, employee retirement pension plans, and all types of medical benefits covered under employee insurance are now available to all employees.

The new codes hope to achieve non-discriminatory laws for all and efficiency in enforcement using technology. The labor codes apply to all employees regardless of their place of work, role, nature of tasks, and salary. Implementation of labor codes is a commendable step forward. However, it requires a massive shift in management for employers. They will have to assess the impact of the codes before finalizing internal policies and governance structures.

The government needs to provide clear direction on implementation plans and notification for the respective organizations of the central and state rules on timelines. The implementation of labor codes will most likely take a few years. As the law evolves, more clarity can be seen in some provisions of the labor codes, and better practices in the industry will start to surface.

To learn more about labor and compliance in India, visit Global People Strategist