India’s Four New Central Labour Rules, 2026: What Employers Need to Know

This blog was originally posted on 9th July, 2026. Further regulatory developments may have occurred after publication. To keep up-to-date with the latest compliance news, sign up to our newsletter.

AUTHORED BY SIDDHANT SHAHANE, REGULATORY COMPLIANCE SPECIALIST, ADHERENT

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Key Insight

India has published four sets of Central Rules for 2026 — covering wages, occupational safety and health, industrial relations, and social security — along with a Draft Standing Order for the manufacturing sector. The Rules introduce major compliance obligations for employers, including a new floor wage, electronic filing, Safety Committees, mandatory Grievance Redressal Committees, and a negotiating union framework. However, uncertainty remains, as the technical criteria for calculating minimum wages have been omitted and will be defined later via special or general orders.

Table of Contents

• Introduction
• Code on Wages (Central) Rules, 2026
• Occupational Safety, Health and Working Conditions Central Rules, 2026
• Industrial Relations (Central) Rules, G.S.R. 342(E), 2026
• Social Security (Central) Rules, 2026
• Manufacturing Sector Standing, Draft Order, May 2026
• Conclusion
• Frequently Asked Questions

Introduction

India’s labour laws, rooted in its colonial past, aim to protect workers’ rights and ensure fair practices. The Factories Act of 1881 laid the groundwork under British rule, regulating working conditions, child labour, and safety standards.

In a bid to modernise the labour rules for the world’s largest democracy, India published the following:

• Code on Wages (Central) Rules, 2026;
• Occupational Safety, Health, and Working Conditions Central Rules, 2026;
• Industrial Relations (Central), Rules, 2026;
• Social Security (Central) Rules, 2026

A Draft Standing Order was also issued for the manufacturing sector and will be discussed in this blog.

Code on Wages (Central) Rules, 2026

The Code on Wages (Central) Rules establish the operational framework for minimum wages, payment of wages, bonuses, working hours, and related compliance under central jurisdiction.

Technical Criteria Used to Calculate Minimum Wages

A notable discrepancy has emerged between the December draft and the finalised Code on Wages (Central) Rules, 2026. The Union government has omitted the specific technical criteria previously used to calculate minimum wages. According to The Indian Express news agency, the government now intends to define these standards independently through “special or general orders” at a later date.

Floor Wages

The Central Government will now establish a floor wage across all industries, to be revised at least every five years. These wages will factor in the cost of food, clothing, housing, and other appropriate factors. State or central minimum wages cannot be lower than the notified floor wage”.

The Rules don’t specify the actual floor wage figure — that will be notified separately. Once announced, its impact will be felt most in states where current minimum wages fall below the new floor. For multi-state employers, particularly in retail, logistics, hospitality, and manufacturing with operations in lower-wage states, this could trigger an immediate rise in wage costs at select locations.

Other compliance requirements for employers include, but are not limited to:

• Minimum Rate of Wages: The rules determine that the minimum wages on a daily rate for specific industries will be established by the Central Government. This rate should be divided by eight to determine minimum hourly rates and multiplied by twenty-six to determine monthly rates.
• Variable Dearness Allowance (VDA) must be revised based on Consumer Price Index data from the Labour Bureau — employers paying minimum wages must monitor revisions and update salary structures accordingly.
• Hours of a Working Day: Employees paid on a daily basis should have a normal working day of 8 hours. Exceptions and substitutions are permitted with additional rules, found in Section 6.
• Rest Days: Employees are to be allowed at least one day of rest every week. Working shifts extending past midnight are directed to have a rest day of twenty-four hours from the time that the shift ends.
• 10-day work week: The Rules limit weekly working hours to 48 and mandate at least one rest day per week. The compliance pitfall lies in the substitution provisions: while employers may reschedule the rest day, no employee can be made to work beyond 10 consecutive days without one.

Occupational Safety, Health and Working Conditions Central Rules, 2026

The Occupational Safety, Health and Working Conditions (Central) Rules, 2026 consolidate and replace numerous earlier central rules governing factories, contract labour, inter-state migrant workers, among others, creating a single compliance framework for establishments under central jurisdiction. OHS is a critical matter for factories, and businesses can prioritise this across all levels using Adherent.

Electronic Applications and Reports

The era of paper-based compliance is coming to an end. These rules allow employers to submit registration applications, health and safety reports, accident reports, etc, electronically. This will enable faster approvals and timely submission of critical reports.

Medical Examinations

Beyond legal compliance, medical examinations serve as a liability shield. If a worker later claims an occupational disease, documented examination records can establish whether the condition existed before employment or developed due to workplace exposure. Hence, under the new Rules, certain employers must arrange to conduct free medical examinations for employees who have reached age 40.

Safety Committees

Every establishment employing 500 or more workers must constitute a Safety Committee. The Central Government may vary this threshold for different classes of establishments by general or special order. The employer must, within 15 days of receiving Safety Committee’s recommendations, take action to implement them.

An explosion at a factory in India last year killed 46 people and injured 33. The likely cause was a dust explosion in the spray dryer unit used to process raw material into fine powder. The investigation concluded that workers had repeatedly approached the management about old machinery and maintenance issues, but these concerns went unaddressed.

Workplace safety disputes often stem from workers not trusting that management takes their concerns seriously, as can be seen in the above case. A jointly constituted committee (with equal employer and worker representation, as under India’s OHS rules) builds a collaborative rather than adversarial dynamic around safety issues.

Other compliance requirements for employers include, but are not limited to:

• Night shift employment for women: The rules do not prohibit night shift employment of women outright, but make it conditional on employer-side obligations — consent, transport, lighting, CCTV, emergency contact access, and Prevention of Sexual Harassment Act compliance — placing the burden of ensuring safe deployment squarely on the employer.
• Working hours and records — Compliance with codified working hour limits and overtime rules, plus electronic wage slips and electronic record-keeping.
• Accident and incident reporting — Dangerous occurrences reported within 12 hours to the Inspector-cum-Facilitator and District Magistrate/Sub-Divisional Magistrate; fatal accidents reported immediately to those authorities, the police, and the victim’s family.
• Mandatory employment letter: This applies across all categories of workers, including contractual and fixed-term employees, not just permanent staff. India has a high percentage of unskilled labour; hence, the explicit inclusion of the Aadhaar unique identity number signals that the appointment letter is intended to serve as an onboarding compliance document, not merely a contractual record.

Industrial Relations (Central) Rules, 2026

The Industrial Relations (Central) Rules, 2026, provide the procedural framework for industrial relations in establishments where the Central Government is the “appropriate government.

Compliance requirements for employers include, but are not limited to:

• Standing orders: Every industrial establishment employing 300 or more workers must prepare and submit draft standing orders based on the notified Draft Model Standing Orders (MSOs).
• Reporting: Where an employer adopts the applicable MSOs, they must inform the certifying officer, specifying the adoption date;
• Service of notice before retrenchment: An employer intending to retrench a worker with at least one year of continuous service must, before effecting such retrenchment, serve a notice in Form-XIII to both the Central Government and the concerned Deputy Chief Labour Commissioner (Central).
• Grievance Redressal Committee: Every industrial establishment employing 20 or more workers must constitute a Grievance Redressal Committee.
• Works Committees: Establishments with 100 or more workers must constitute a Works Committee for employer-worker cooperation, capped at 20 members, with worker representatives not fewer than employer representatives.
• Negotiating Union: The negotiating union framework under Rule 9 is an entirely new provision introduced by the 2026 Rules with no equivalent in the superseded 1957 Rules. The 30% single-union recognition threshold is mandatory, leaving no employer discretion. The employer bears the full cost of verification regardless of the outcome.

Social Security (Central) Rules, 2026

These Rules apply to establishments where the Central Government is the appropriate government, notably including establishments operating in more than one State, which gives this particular set of Central Rules broader reach than the other three. They operationalise key aspects of the Social Security Code relating to provident fund, employee state insurance, gratuity, maternity benefits, employee compensation, building and construction workers, gig and platform workers, and compliance/reporting obligations under a consolidated framework.

Compliance requirements for employers include, but are not limited to:

• Establishment registration: Every employer of an unregistered establishment must apply electronically on the Shram Suvidha Portal;
• ESI compliance: Employers must complete ESI portal registration of new employees;
• Vacancy reporting: The Rules introduce mandatory vacancy reporting within prescribed timelines (successor to the Employment Exchanges regime, whose 1960 rules are superseded).

Record-keeping under Chapter 10

In accordance with Chapter 10, employers will now be required to maintain four primary types of records:

• Employee Register: A general list of all staff (Form I).
• Attendance/Muster Roll: A daily record of presence (Form IX).
• Financial Register: Details of wages, overtime, advances, fines, and deductions (Form IV).
• Women Employee Register: A specific log for female staff (Form XXII).

Manufacturing Sector Standing, Draft Order, May 2026

The draft Order classifies and defines the various types of workers: permanent, temporary, apprentices, probationers, badlis, fixed-term employment, and casual workers.

Compliance requirements for employers include, but are not limited to:

• Identity Badge: Every worker shall be issued an identity badge or card;
• Publication of work timings: Hours of work applicable for all categories of workers shall be exhibited on the notice board or electronic notice board and on the portal of the industrial establishment, in Hindi, English, and local language;
• Publication of wage rates: Wage rates payable to the workers shall be displayed on the electronic notice board;
• Transfer Policy: Every industrial establishment shall have a transfer policy;
• Termination of employment: The employer shall give prior notice of one month

Conclusion

Recently, large protests were held by workers and labour unions to demand a higher minimum wage. The 4 new Rules have drawn criticism as well as praise from different sectors of society. There are plenty of Rules aimed at enhancing worker safety and promoting equality; however, there remains uncertainty over issues such as technical criteria previously used to calculate minimum wage, as the Government will implement this via a special order in the future. Women employees’ safety during night shifts remains a large concern, and it would be a consolation to see that the new OHS Rules help improve this aspect. Implementation and enforcement are complicated subjects, but we are still in the early days. For more support on Labour-related matters, feel free to reach out to our in-house subject matter expert.

Frequently Asked Questions

• What is the floor wage under the Code on Wages (Central) Rules, 2026?
  The Central Government will establish a floor wage across all industries, revised at least every five years, factoring in the cost of food, clothing, housing, and other appropriate factors. State or central minimum wages cannot be lower than the notified floor wage. The Rules don’t specify the actual figure — it will be notified separately, and its impact will be felt most in states where current minimum wages fall below the new floor.
• When must an establishment constitute a Safety Committee?
  Every establishment employing 500 or more workers must constitute a Safety Committee, though the Central Government may vary this threshold for different classes of establishments by general or special order. The employer must take action to implement the committee’s recommendations within 15 days of receiving them.
• Can women work night shifts under the new OHS Rules?
  Yes — the rules do not prohibit night shift employment of women outright, but make it conditional on employer-side obligations, including consent, transport, lighting, CCTV, emergency contact access, and Prevention of Sexual Harassment Act compliance. The burden of ensuring safe deployment rests squarely on the employer.
• What is the negotiating union framework under the Industrial Relations Rules?
  The negotiating union framework under Rule 9 is an entirely new provision introduced by the 2026 Rules, with no equivalent in the superseded 1957 Rules. The 30% single-union recognition threshold is a mandatory obligation leaving no employer discretion, and the employer bears the full cost of verification regardless of the outcome.
• Which records must employers maintain under the Social Security (Central) Rules, 2026?
  In accordance with Chapter 10, employers must maintain four primary types of records: an Employee Register (Form I), an Attendance/Muster Roll (Form IX), a Financial Register covering wages, overtime, advances, fines, and deductions (Form IV), and a Women Employee Register (Form XXII).

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