Introduction
Between May 8 and 9, 2026, the Ministry of Labour and Employment (“MoLE“) formally notified the long-awaited rules under India’s 4 (four) new labour codes (“Labour Codes“), marking a significant step towards the operationalization of India’s latest labour law framework. These newly finalized central rules (“Central Rules“) replace a wide range of subordinate legislations and rules under India’s earlier labour framework and provide operational clarity on various provisions under the Labour Codes.
The finalization of the Central Rules is of particular significance because enforceability of the provisions under the Labour Codes depends substantially on the framing of subordinate legislation by both the Central and State Governments. This article forms Part I of a two-part series examining the Central Rules and the key compliances and implications for employers, with a focus the Code on Wages (Central) Rules, 2026 (“Wages Rules“) and the Social Security (Central) Rules, 2026 (“SS Rules“).
The Code on Wages (Central) Rules, 2026
The Wages Rules establish the procedural framework governing minimum wage and floor wages, payment of wages and bonus, recovery of deductions etc. Through the notification of the Wages Rules, the MoLE has repealed 17 (seventeen) subordinate legislation under the earlier labour framework, including the Minimum Wages (Central Rules), 1950, and the Payment of Bonus Rules, 1975.
Minimum Rate of Wages
Rule 3 of the Wages Rules lays down the manner of calculating the minimum rate of wages by providing that when the rate of wages for a day is fixed by issue of special or general order by the Central Government, such amount shall be divided by 8 (eight) for fixing the hourly rate of minimum wage, and multiplied by 26 (twenty-six) for fixing the minimum wages for a month. In such division and multiplication, factors of ½ (one-half) and more shall be rounded up to the next figure and factors less than ½ (one-half) shall be ignored.
Weekly Rest and Working Hours
The Wages Rules align with the provisions of the other Central Rules and the Labour Codes by laying down the cap for an 8 (eight) hour workday and a 48 (forty-eight) hour work week under Rule 5. Further, the Wages Rules mandate 1 (one) weekly day of rest under Rule 6, and employees are not allowed to work on the rest day unless such employee is allowed a substituted rest day on one of the working days in a week immediately before or after the rest day, provided that no substitution shall be made which shall result in the employee working for more than 10 (ten) days consecutively without a rest day.
Recovery of Deductions
Rule 13 states that where the total deductions to be made against the wages of an employee exceed 50 (fifty percent) of the wages of an employee, the excess shall be carried forward and recovered from the succeeding wage period in instalments, such that the recovery in any month shall not exceed 50% (fifty percent) of the wages of the employee for that month.
Payment of Wages and Bonus to Contractual Employees
For employees employed through a contractor, the company, firm or person who is the proprietor of the establishment where the employee works shall pay to the contractor the amount payable in respect of the wages of such an employee under Rule 11. Further, under Rule 21, if the contractor fails to pay bonus to the employee, the company or firm who is the proprietor of the establishment shall, on the written information of such failure given by the employees (or any registered trade union) and on confirming such failure, pay the minimum bonus to the employee.
The Social Security (Central) Rules, 2026
The SS Rules operationalize the framework under the Labour Codes, governing provident fund, employee state insurance, gratuity, registration and overall social security administration. The notification of the SS Rules by the MoLE has also repealed 12 (twelve) subordinate legislation under India’s previous labour regime governing social security administration, including the Payment of Gratuity (Central) Rules, 1972 and the Employee State Insurance (Central) Rules, 1950.
Employee State Insurance Contributions
The SS Rules fix the rate of contribution payable to the Employee State Insurance Corporation (“ESIC“) at: (i) 3.25% (three point two five percent) for employers; and (ii) 0.75% (zero point seven five percent) for employees. Further, in respect of persons with disabilities, employers are exempt from paying the employer’s contribution to the ESIC up to a maximum period of 3 (three) years or such period as may be specified by the Central Government.
Gratuity
Employees who are eligible for gratuity must apply to the employer ordinarily within a period of 30 (thirty) days from the date the gratuity becomes payable. However, no claim for gratuity under the Wages Rules shall be invalid merely because the claimant failed to present his application within the specific period. Additionally, for fixed-term employees who shall be eligible for gratuity after 1 (one) year, if they render service under contract for a period of 1 (one) year and a subsequent period of 6 (six) months or more, the period of service for the purpose of calculation of gratuity shall be rounded up to 1 (one) additional year.
Maternity Benefits
The SS Rules formalize and operationalize the maternity benefit framework under the Labour Codes. While Rule 35 lays down the manner of evidencing pregnancy, childbirth, miscarriage etc., it also lays down that the medical bonus of Rs. 3,500 (Rupees Three Thousand Five Hundred Only) shall be paid along with the maternity benefit due to a woman employee. Further, every woman delivered of a child shall be entitled to no less than 2 (two) nursing breaks of 15 (fifteen) minutes each under Rule 36, along with an extra period of up to 15 (fifteen) minutes for the purpose of journey to and from the crèche. Such crèche shall be located within 1 (one) kilometer of the establishment under Rule 37.
Gig and Platform Workers
Rule 48(2) provides for mandatory registration of gig and platform workers above the age of 16 (sixteen) years on the portal designated for such purpose by the Central Government. Within 45 (forty-five) days of the commencement of the SS Rules, aggregators are required to share the details of such gig and platform workers on the designated portal for the generation of a Universal Account Number. Further, under Rule 49(4), every gig and platform worker above the age of 60 (sixty) years shall no longer be eligible for the benefits of the social security schemes under the SS Rules.
Conclusion
The finalization of the Central Rules provides employers with a clear indication that India is entering the next phase of workforce compliance. In complying with the Wages Rules and the SS Rules, employers should be vigilant and are well advised to begin reviewing payroll structures, social security practices and registration processes. Though the rules by the State Governments are still pending, a proactive approach to compliance initiated at an early stage will better position employers, once the state-level frameworks and enforcement timelines are rolled out.
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