New MSME labour code implementation to be under scrutiny as old laws get replaced

The Centre’s rollout of four consolidated labour codes has ushered in significant changes for workers employed in micro, small and medium enterprises (MSMEs), introducing mandatory minimum wages, improved workplace conditions and broader social security coverage.

Under the new framework, all MSME employees will now come under the ambit of the Social Security Code, with benefits determined by the size of the workforce. The rules mandate minimum wages across all establishments and guarantee standard working hours, paid leave and double pay for overtime. Employers are also required to ensure timely wage disbursals and provide essential amenities such as drinking water, canteens and rest areas.

The Code on Wages, the Industrial Relations Code, the Code on Social Security and the Occupational Safety, Health and Working Conditions (OSHWC) Code came into force on 21 November, replacing 29 central labour laws that had evolved over several decades.

The government has described the implementation as a “historic” overhaul of India’s labour framework, arguing that the reforms modernise outdated regulations and enhance worker safeguards. Officials said the consolidation moves the country away from a fragmented legislative structure rooted in the pre- and early post-Independence era, bringing Indian labour standards closer to global norms.

According to the Centre, the revamped laws are designed to strengthen both workers and businesses by creating a “protected, productive and future-ready workforce” and by supporting industries in becoming more resilient and competitive.