• For every completed year of service or part thereof in excess of six months:

• 15 days’ wages per year (or such number as notified by Central Government) based on the rate of wages last drawn.

Special cases:

• Piece-rated employees: Daily wages calculated as average of total wages for the three months preceding termination (excluding overtime)

• Seasonal employees: 7 days’ wages per season

• Fixed-term employment or deceased employees: Gratuity paid on pro-rata basis

• The maximum gratuity is as notified by the Central Government which is currently ₹ 20 lakhs.

• For employees re-employed after disablement:

       Wages for the period preceding his disablement shall be taken to be the wage received by him during that period.

       Wages for the period subsequent to his disablement shall be taken to be the wages as so reduced.  

• Completion of five years of continuous service is not necessary in case of:

      Death (paid to nominee or legal heirs)

      Disablement  Expiration of fixed-term employment

      Other events notified by the Central Government

• If the nominee or heir is a minor, the share shall be deposited with a competent authority and invested in bank/financial institution for the benefit of such minor until majority 

Gratuity shall be payable on following events:

• On termination

• On superannuation (retirement due to age)

• On resignation

• On death or disablement due to accident or disease

• On expiration of a fixed-term employment contract

• On any other event notified by the Central Government 

Gratuity will be applicable w.e.f. 21st Nov, 2025 i.e. date of enforcement of the Code. Establishments may make provision as per accounting norms.

Gratuity will be applicable w.e.f. 21st Nov, 2025 i.e. date of enforcement of the Code.

• This single definition of wages applies across all four Labour Codes

• The same definition applies uniformly for statutory calculations 

As mentioned in Section 2(y) of Code on Wages, 2019, leave encashment is not a part of allowances. 

• If the allowances and benefits together (except gratuity and retrenchment compensation) exceed 50% of the all remuneration, the excess amount shall be added back to wages. • Such added amount shall be treated as wages for statutory purposes. 

The definition of “Wages” covers:

• All remuneration whether by way of salary, allowances or otherwise. These include Basic pay, Dearness allowance and Retaining allowance, if any.

• If the allowances (except gratuity and retrenchment compensation) exceeds 50% of all remuneration, the excess amount shall be added back to wages.

• Performance based incentives, Employee Stock Option Plans (ESOPs), variable part of the component or reimbursement-based payments to the employee shall not be part of the wages. 

The definition of “Wages” covers:

 • All remuneration whether by way of salaries, allowances or otherwise payable to a person employed. This includes: Basic pay, Dearness allowance, Retaining allowance, if any

• If the payments/allowances other than Basic pay, Dearness allowance and Retaining allowance exceed 50% or such percentage as notified of all remuneration, then amount     exceeding 50% or such percentage as notified shall be added in the “Wages”. 

As per the provisions of Section 6 of General Clauses Act, 1897, old rules will remain in force till final notification of new rules under the Code, to the extent these are in line with Codes.

Yes, a contract worker can demand from concerned contractor to issue experience certificate.

A worker should have worked for 180 or more days in a calendar year to be eligible for annual leave with wages.

No. Under the definition of “audio-visual worker” in the Code, stuntmen and dubbing artists are also covered and will get the safety, health and welfare benefits provided to audio-visual workers.

Yes. The Contract workers are covered for welfare facilities which will now be provided by the principal employer.

Yes. The Motor Transport Workers including drivers are covered under the Code. The provisions on safety, health and welfare under the Code apply to them, including working hours, rest intervals etc.

Yes. The Code recognizes first time the transgender workers and mandates separate bathing, toilet, restroom etc. facilities for them ensuring dignity, privacy and equal access at the workplace.

No. Rather, penalties have been rationalized and only minor offences are compoundable, while serious safety breaches attract severe penalties including imprisonment.

The Code covers all employees, including fixed-term employment workers and they will get all benefits like appointment letters, annual health check-ups etc.

No. The Code ensures women’s right to work in any occupation with adequate safety and with sufficient safeguards to promote gender equality.

No. The Code does not distinguish regular and contract workers or ISMW. The Code extends benefits to all workers, including contract and inter-state migrant workers.

Labour is in concurrent list of the Constitution. Accordingly, State are allowed to make rules for certain allocated sphere keeping in view of the local conditions and responsiveness to regional needs.

No. The Code requires setting up of Toll free helpline number for Inter State Migrant Worker (ISMW). ISMW can reach to govt through toll free number in case of difficulty faced by them.

No. The Code simplifies and harmonizes provisions with protection of worker rights. Simplification and harmonization remove ambiguities and brings consistence in protection of workers.

No. The Code mandates health and safety provisions for all workers employed in establishments employing 10 or more employees.

No. The new system of inspection promotes transparent, technology-based inspections while maintaining accountability and facilitating employer ensuring better compliance. Code promotes compliance. Better compliance will ensure better protection to workers.

No. The Code gives women’s right to work in any establishment and night shift with the safeguard of adequate safety, transport, and security arrangements—thus promoting gender equality with safeguards. Moreover, consent of women worker is mandatory to work in night.

No. The Code prescribes 8 hours per day and 48 hours per week as standard, with some flexibility to extend daily hours with the consent of workers on payment of overtime, at twice the rate wages.

No. All establishments having 10 or more employees must comply with safety and welfare measures. The increases licensing threshold is for administrative ease and does not affect workers’ entitlements/protections.

No. The rights of workers regarding health, safety and welfare would be protected as these provisions are applicable for the establishments having 10 or more employees.

“Working Journalist” employed in a newspaper/agency have now been included under the definition of worker under the IR Code.

No. The sales promotion employees are legally recognized under the definition of ‘worker’ under the IR code.

No. The code protects the interest of workers through the provisions of negotiating unions/councils, works committee, Grievance redressal committee, requisite safeguards before retrenchment/lay-off and closure and effective dispute resolution mechanism.

No. With the provision of 2 member Industrial Tribunal, the justice will be speedily delivered.

No. “Labour” is a concurrent subject under the Constitution of India and its jurisdiction is clearly defined in the codes. The State governments are appropriate government under all the four Labour Codes and they have to exercise their power as appropriate government.

No. Penal provisions are not compromised instead penalties have been substantially increased and made commensurate with the offences.

Workers’ participation have been ensured through Bipartite forums such as Works Committees and Grievance Redressal Committees under the IR Code.

Lay-off/Retrenchment/Closure have been well regulated under IR Code. Industries having 300 workers on any day of previous year will need prior permission from the Government. All benefits such as retrenchment compensation, priority in re-employment, etc. have been kept under IR Code.

No. Mandatory recognition of a sole negotiating union/council strengthens structured bargaining by the workers with their employer.

The Labour Courts and Industrial Tribunals will be replaced with a simplified two-tier tribunal system reducing delays and multiplicity of forums. Instead of one member the IR Code has introduced two member Tribunals for speedy delivery of justice.

No. Rather, the conciliation mechanism have been streamlined and conciliation is now made compulsory in all strike notice and conciliation proceeding shall be commenced on the 1st meeting of conciliation. Fixed time-line, digital process and clear jurisdiction will now facilitate for faster settlement of disputes.

No. The requirement for mandatory one month notice and retrenchment compensation for every completed year of service continue. Prior permission will be required for retrenchment by establishments having 300 or more workers. Also, additional provision of re-skilling fund for retrenched workers to enhance their skills to get better job perspective has been introduced for the welfare of the worker.

No. Fixed Term Employees will be eligible for all benefits (EPF, ESI, flexible working hours, timely and minimum wages) equal to permanent employees. They will also be eligible for Gratuity on completion of one year of service. This will reduce contractualisation. Fixed Term Employee will get appointment letter directly from the employer enhancing their pride. This will also increase their employability as freshers can gain experience in a short span of time and enhance specialized skills.

No. The workers rights and job security remain protected in the IR Code with provisions for mandatory one month notice and retrenchment compensation. Prior permission will be required for retrenchment by establishments having 300 or more workers

No. It is not true. Instead Trade Unions get statutory backing in the form of negotiating union/negotiating council under the code thereby strengthening their collective bargaining. The code also provides for bipartite forums like Works Committee and Grievance Redressal Committee, having equal representation will facilitate time bound redressal of grievances of workers.

No. The provisions for mandatory one month notice and retrenchment compensation continue to exist. Prior permission will be required for retrenchment by establishments having 300 or more workers.

No permission is required from the Government under the IR Code. However, 14-Days prior strike notice will be required which will facilitate both employer and union for immediate resolution of their dispute through timely conciliation leading to reduced their conflict.

No. The Industrial Relations (IR) Code, 2020 does not ban strikes. Right to strike remains intact under IR Code with mandatory 14 days notice period before going on strike.

No. The apprehension is totally incorrect. Provisions related to registration of trade union have been retained under Chapter-III of IR Code 2020.

No. The Code on Wages applies to all employees, employed in the organized or unorganized sector. It ensures minimum wages and timely payment. The Code universalizes minimum wages for all categories of employees.

No. The Code covers all employees, including full-time, part-time, temporary, casual and contractual workers.

No. Deterrent and enhanced penalties are provided under the Code on Wages. Employers are given the opportunity to rectify irregularities; however, compounding is limited to the first offence and a repeat of offence within a period of 5 years is punishable with imprisonment that may extend up to 3 months or fine or with both. This system reduces unnecessary litigation while ensuring that employers cannot evade their responsibilities.

The Employers shall not discriminate on ground of gender including transgender in matter relating to wages, recruitment of an employee for the same work or work of a similar nature and in the conditions of employment.

No. Flexibility in working hours will not curtail the minimum wage, and employees working beyond normal hours are entitled to the overtime rate which shall not be less than twice the normal rate of wages.

No. The duties and powers of the inspector are retained, and he will enforce the provisions, simultaneously raising awareness among workers about their rights and guiding employers in compliance.

No. The Central as well as the State Governments will fix minimum wages within their respective jurisdictions. They must set these wages above the floor wage and after consulting workers and employers representatives. So, the process is fair, balanced, and not arbitrary.

No. The Code caps all deductions at 50% of wages—uniform and protective compared to earlier 75% for cooperative deductions. The deduction are restricted to 50% of wages.

No. The definition brings transparency and uniformity. Allowances exceeding a fixed percentage as notified by central government are added back to wages, increasing the base for PF, gratuity, and bonus, benefiting workers. It will strengthen social security of employees.

No, Floor Wage is a baseline. Where the minimum rates of wages fixed by the State Government earlier is more than the floor wage, the State Government shall not reduce such minimum rates of wages fixed by it earlier.

Bonus is payable to every employee who has worked for at least thirty days in an accounting year as per the wage ceiling prescribed by the appropriate government.

Yes. The concept of scheduled employment has been done away under the Code on Wages. The Code is now universally applicable to all employees, irrespective of their sector or category.