Budget 2025 Expectations: Finance Minister Nirmala Sitharaman may present a plan to implement the Labor Codes in a phased manner in Budget 2025. In the first phase, it will be applicable to companies with more than 500 employees, in the second to companies with 100-500 employees and in the third to companies with less than 100 employees.
Union Finance Minister Nirmala Sitharaman may present a blueprint for the phased introduction of Labor Codes from the next financial year in her Budget 2025 speech. An ET report quoted government sources as saying that options for implementing it in three phases are being considered. In the first phase, large companies with more than 500 employees will have to comply with this law.
In the second phase, medium companies with 100-500 employees and in the third phase, small companies with less than 100 employees will be brought under its purview. This strategy will give small businesses, which account for more than 85% of India’s business structure, two years to comply with these codes.
Discussions continue with states regarding labor codes
The Labor Ministry is currently in talks with the West Bengal and Delhi administrations to finalize the draft regulations. According to sources, the government is considering implementing less controversial codes like the Code on Wages and the Social Security Code first, while being cautious on labor issues. An official said that senior officials of the Labor Ministry have started talks with the Chief Secretaries of these states so that the draft rules of the four labor codes can be finalized quickly.
Will be implemented in different phases
Another official said, “The ministry hopes that by the end of the current financial year, all the states will prepare the draft rules of the four codes. After this, the central government will be able to implement the codes.” With the aim of making the operation of businesses more effective and strengthening social security, the administration has consolidated 29 central labor laws into four labor codes.
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