Labour Secretary Vandana Gurnani has said that the implementation of the Labour Codes will lead to stronger worker protections and higher employer contributions to benefits such as gratuity and maternity leave, without significantly impacting employees’ take home salaries. Speaking in an interview at her New Delhi office, she outlined how the Centre and states are coordinating to roll out the reforms while minimising bureaucratic hurdles.
She emphasised that labour being a concurrent subject requires states to notify their own rules under the Labour Codes.
According to her,
Engagement with states has been ongoing for years and is not a recent development. The ministry has already conducted six regional consultations, and the rules framed by states are aligned with the national framework.
While states have flexibility to adapt provisions to local needs, the overall structure defined by the Codes ensures uniformity.
Addressing concerns that state level flexibility could lead to wide variations and confusion for employers and employees,
Gurnani said,
The Codes clearly define areas where states are empowered to frame rules. So far, no major divergence has been observed, as all rules remain within the boundaries of the central framework.
On the execution of worker friendly provisions such as minimum wages and universal social security, she said, the new system removes ambiguity. Minimum wage provisions are now universal, reducing interpretation related disputes. The government also plans to introduce a floor wage, below which no state will be allowed to fix minimum wages.
To improve enforcement, the labour ministry is working towards a technology driven inspection system. Inspections will increasingly be web based and supported by artificial intelligence and big data analytics. This approach is intended to focus regulatory attention on defaulting organisations, improve oversight and reduce direct human interface.
Several safeguards have also been built into the Codes. Workplaces will have grievance redressal committees with tripartite representation, alongside legally recognised trade unions. Labour tribunals are being strengthened with the inclusion of both judicial and administrative members, a move expected to speed up case disposal.
For social security coverage, the government plans to set up a national tripartite board for unorganised workers to oversee implementation. Separate tripartite boards are also proposed for gig and platform workers, reflecting the changing nature of employment.
Responding to concerns that changes in the definition of wages could lower take home pay, Gurnani explained that the reform aims to correct past practices where wages were artificially reduced and allowances inflated. Under the new formula, if allowances exceed 50 percent of total pay, the excess is added to basic wages. This results in higher employer contributions to gratuity and maternity benefits, both of which are the employer’s responsibility.
She clarified that the impact on provident fund deductions would be minimal, as mandatory contributions apply only up to a basic wage of Rs 15,000, while higher contributions are voluntary and mutually decided by employers and employees. As a result, claims of drastic reductions in take home salaries are not accurate.
On the potential impact of artificial intelligence on jobs, Gurnani said that while some roles may be disrupted, new employment opportunities will also emerge. The labour ministry is upgrading the National Career Service portal to improve job matching and is piloting efforts to integrate it into India’s digital public infrastructure, making it more accessible and useful for the broader employment ecosystem.
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