Together, they replace or consolidate 29 earlier central labour laws, marking one of the most significant rewrites of India’s employment framework in decades.
WHAT CHANGES UNDER THE NEW WAGE CODE?
Minimum wages for all workers
Earlier, minimum wages applied only to workers in ‘scheduled’ industries under various state laws.
Under the Code on Wages, every worker is now entitled to a statutory minimum wage, regardless of sector or skill category. This gives nationwide legal protection to millions of workers previously outside the wage threshold.
Creation of a national floor minimum wage
For the first time, the Code on Wages introduces the concept of a national floor minimum wage — a baseline that states cannot go below.
This creates a consistent wage benchmark across the country. States may still notify higher rates, but the floor ensures a minimum level of income and helps reduce inter-state disparities.
Timely and mandatory wage payments
The code ensures:
- Fixed timelines for payment of wages.
- Uniform definitions of key wage components.
- Simplified compliance for employers.
This consolidates multiple earlier laws, including the Payment of Wages Act and Minimum Wages Act.
Push for formalisation of employment
The requirement for mandatory appointment letters for all workers and a uniform wage definition pushes more workers into the formal economy.
Experts believe this shift could expand structured employment across contract, temporary, and project-based roles.
WHY THESE WAGE CHANGES MATTER?
According to Balasubramaniam A, Senior Vice President, TeamLease Services, only 15% of India’s workforce is currently in the formal sector. The new codes, by simplifying compliance and unifying wage rules, “have the potential to fundamentally change that trajectory” and bring millions into protected, structured work.
He also notes that the national floor minimum wage is “an important step in India’s evolution from a minimum-wage economy to a living-wage economy,” helping ensure dignity, protection, and predictable financial stability for workers.
Sajai Singh, Partner at JSA, calls minimum wages, social security expansion, and appointment letters for all workers “welcome, progressive moves that recognise the times we live and work in.”
However, he emphasises that full impact will depend on states adopting these codes, since labour remains a concurrent subject.
WHERE STATES FIT IN
Although the codes are notified, states must publish and enforce their own rules before full implementation begins. Until then, older rules continue to operate where necessary, as clarified by the government.
WHAT ABOUT MNREGA?
MNREGA operates under a separate legal framework and is not governed by the Code on Wages. The scheme guarantees 100 days of paid manual work per rural household and its wage rates are set independently under the MNREGA Act.
