The Labour Codes Are in Force: What Changed on a Garment Factory Floor

The four labour codes came into force on 21 November 2025 and replaced 29 central labour Acts in one day: the Code on Wages 2019, the Industrial Relations Code 2020, the Code on Social Security 2020 and the Occupational Safety, Health and Working Conditions Code 2020. The Central Rules under them were notified on 8 May 2026. For a garment factory they land on the payslip, the overtime register, the piece-rate card and the night shift roster.

Whose rules apply to a factory today?

The Codes apply everywhere since 21 November 2025. The rules come in two layers: the Central Rules of 8 May 2026 for establishments under Central jurisdiction, and each State's own rules for everyone else, which is most factories. The Ministry's FAQ settles the gap: old rules under the repealed Acts continue until the new rules are notified, to the extent they are consistent with the Codes. Your State's minimum wage schedule still stands; the Code's own provisions on wages, overtime and gratuity already override anything in the old Acts that contradicts them.

What does the 50 percent wage rule do to a garment payslip?

Section 2(y) of the Code on Wages defines wages as all remuneration, then lists what is excluded: house rent, conveyance, bonus, overtime and similar allowances. If the excluded items add up to more than one-half of all remuneration, the excess is added back into wages. A payslip built as a low basic plus a stack of allowances now has a floor: at least half of what the worker receives counts as wages for PF, gratuity, bonus and leave encashment. The Ministry's additional FAQ of 16 March 2026 adds that overtime allowance, the employer's PF contribution and statutory bonus all sit inside that 50 percent calculation.

What counts as overtime now, and what does it cost?

The OSH Code fixes the normal day at 8 hours and the week at 48. Rule 21 of the Code on Wages (Central) Rules 2026 repeats the 8-hour day for daily-rated workers and the 48-hour week for the rest, requires at least one rest day a week, and bars more than 10 consecutive working days without one. Section 14 of the Code on Wages sets the price: not less than twice the normal rate of wages for every hour or part of an hour beyond normal hours. Daily hours can be stretched only with the worker's consent, and a worker called in on the rest day gets a substituted rest day plus overtime. A peak-season floor running 10 hours a day at single rate is now a computable liability, recorded in the mandatory overtime register.

Does a piece-rate tailor still have a minimum wage?

Yes. Section 6(3) requires the Government, when fixing minimum wages for piece work, to secure those workers a minimum rate on a time-work basis. Section 12 then puts the obligation on the employer: where a minimum time rate and not a minimum piece rate has been fixed, the employer must pay a piece worker not less than that time rate. A stitcher on per-piece rates who has a slow day on a difficult style cannot end it below the daily minimum. The per-piece card sets what the worker can earn above the floor, never the floor itself.

What changes for seasonal and fixed-term workers?

Fixed-term employment is now recognised across the Codes, and the Ministry's FAQ states the two consequences that matter to a factory that staffs up for a season. A fixed-term worker gets the same benefits as a permanent worker for the term, including leave, medical and social security. And gratuity is payable on a pro-rata basis once the worker has completed one year under the contract; the five-year qualifying period does not apply when a fixed term expires. A worker on rolling seasonal contracts is accruing gratuity from the first anniversary, whether or not anyone has written it down.

Can women work the night shift?

Yes, in any establishment and in any kind of work. The OSH Code allows women to work before 6 a.m. and after 7 p.m. on two conditions: the worker's consent, and the employer's arrangements for safety, facilities and transport. That opens a second shift, and it turns transport and a lit, staffed premises from a courtesy into a statutory condition of the roster.

What must be on paper?

Four things, all from the Codes and the Ministry's employer handbook. An appointment letter for every worker, in the prescribed format, stating designation, category, wages and social security details. Four registers: attendance, wages, overtime, and fines and deductions. Wages paid on time under Section 17: monthly wages before the seventh day of the next month, and full and final settlement within two working days of a worker leaving, resigning or being removed. And the thresholds that decide which duties apply: a factory is now 20 workers with power or 40 without, a contract labour licence is needed at 50 contract workers, a grievance redressal committee at 20 workers, a creche at 50. The same year rewrote the MSME delayed payment regime as well.

The Codes, the Central Rules, the Ministry's FAQs and its employer handbook are all public, and each change above cites the section it comes from. What they ask for is a payslip, an overtime register and a piece-rate card that would survive being read against them.