The Ministry of Labour and Employment (MoLE) on November 21, 2025 (effective date of Labour Codes) issued clarifications through FAQs addressing key interpretational and implementation issues under the Labour Codes, particularly the Code on Wages, 2019, Code on Social Security, 2020, Industrial Relations Code, 2020, and the Occupational Safety, Health and Working Conditions Code, 2020. The clarifications provide guidance on wage definition, inclusion of variable components like overtime, distinction between wages and minimum wages, and applicability of gratuity and social security provisions.
The FAQs clarify that components such as overtime allowance form part of wages, subject to the 50% cap rule, and that fixed-term employment applies only to direct employees and not contract labour. Gratuity provisions under the Code on Social Security, 2020 are applicable prospectively from November 21, 2025, with eligibility for fixed-term employees upon completion of one year of service. Further, ESI coverage continues at the ₹21,000 threshold while adopting the new wage definition, and gratuity liability in contract labour cases rests with the contractor as employer.
Additionally, under the Occupational Safety, Health and Working Conditions Code, 2020, leave provisions apply primarily to workers (including certain supervisors), with a carry-forward limit of 30 days and no cap on encashment at separation. Overtime is payable beyond 8 hours per day or 48 hours per week at double wages, and crèche facilities are gender-neutral. The FAQs also clarify precedence between Central and State rules and reinforce that provisions of Labour Codes prevail over inconsistent State laws, subject to more beneficial conditions for employees.
