{"id":63494,"date":"2025-03-28T11:30:00","date_gmt":"2025-03-28T06:00:00","guid":{"rendered":"https:\/\/idronline.org\/?post_type=article&p=63494"},"modified":"2025-04-08T21:36:18","modified_gmt":"2025-04-08T16:06:18","slug":"do-indias-labour-codes-address-informal-workers-needs","status":"publish","type":"article","link":"https:\/\/idronline.org\/kn-in\/article\/rights\/do-indias-labour-codes-address-informal-workers-needs\/","title":{"rendered":"Do India\u2019s labour codes address informal workers\u2019 needs?"},"content":{"rendered":"

Four labour codes passed by the Government of India in recent years are due for implementation. These codes mark a historic step in governing labour in contemporary India. They include the Code on Wages, 2019<\/a>; the Occupational Safety, Health and Working Conditions Code, 2020<\/a>; the Code on Social Security, 2020<\/a>; and the Industrial Relations Code, 2020<\/a>. This codification is critical in ensuring that the informal workers of the country, who make up the majority of the workforce, receive due recognition and welfare. <\/p>

But how do these new labour codes address to the needs of unorganised workers? What impact will they have on the working lives of low-income workers? Are there any promising signs for this vast segment of informal workers engaged in precarious occupations across the country? <\/p>

The informal sector and the significant number of people employed in it are not new concerns in India. However, the labour codes offer policymakers an opportunity to rethink existing legislation and introduce changes that can offer relief to those who have been working in precarious occupations. India has one of the world’s largest informal working populations. According to a recent estimate, the country has approximately 110 million<\/a> informal sector workers, including those employed in agriculture, construction, and small factories; domestic workers; coastal and forest workers; ragpickers; autorickshaw drivers; street vendors; and power loom workers—a few among many overlooked professions. These workers are all around us yet remain largely invisible, especially to the state. Their invisibility manifests as a lack of written contracts, uncertainty in wages, irregular payments, and limited provisions for taking leaves. As of May 2022, more than 94 percent<\/a> of workers registered on the e-Shram portal<\/a> (national database of unorganised workers) reported an income of INR 10,000 or less. <\/p>

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Construction workers, agricultural labourers, forest workers, and many others complained that wage theft has become the norm. | Picture courtesy: EqualStock IN<\/a> \/ CC BY<\/a><\/figcaption><\/figure>

In many states, institutional structures such as the Directorate of Industrial Safety and Health, Building and Other Construction Workers Welfare Board, Unorganised Workers’ Social Security Board have failed to provide informal workers with safeguards like guaranteed minimum wages, workplace safety, and pension benefits. For example, an International Labour Organization (ILO) report found that in 2022, 70 percent<\/a> of workers in the construction sector in India did not receive the prescribed minimum wage.  <\/p>

However, the new labour codes are being hailed as the “biggest labour reforms in independent India”<\/a>. The central government is positioning them as an effort to effectively implement minimum wages, ensure a safe working environment, and provide social security to everyone. If backed by political will, they present a watershed opportunity to provide relief in the form of social security. <\/p>

Major concerns faced by informal workers<\/h3>

Informal sector workers are plagued by concerns of non-payment of minimum wages, deplorable work environments, unhealthy living conditions, and a lack of access to social security benefits. These issues were also highlighted at Labour Codes and Unorganised Labour, a two-day workshop organised by the Asangathit Shramik Hit Rakshak Manch (Unorganised Workers Social Protection Platform) in September 2024 in Ahmedabad, Gujarat. The workshop brought together 32 informal workers’ organisations from Gujarat to bridge the awareness gap by deepening their understanding of how the implementation of the four new labour codes could benefit informal workers. <\/p>

I attended this event as part of a 14-month ethnographic study, during which I worked with Bandhkam Mazdoor Sangathan, an Ahmedabad-based trade union. I also spent time with a civil society organisation called Aajeevika Bureau<\/a>. The ethnography aimed to deconstruct the lived realities of migrant construction workers in Gujarat and their access to welfare schemes. <\/p>

Here are some of the challenges raised by the workers at the event:<\/h3>

1. Non-payment of minimum wages<\/h3>

Although minimum wages are guaranteed through the Minimum Wages Act, 1948<\/a>, many informal workers still do not receive<\/a> them. Construction workers, agricultural labourers, forest workers, and many others complained that wage theft by contractors, middlemen, and even employers has become the norm. <\/p>

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2. Precarious working environment<\/h3>

Many informal workers work in precarious conditions<\/a> (construction, power looms, fisheries, factories), where occupational health hazards and accidents are common. Some precarious workers have also lost their lives<\/a> owing to the lack of enforcement of safety regulations.<\/p>

3. Substandard living conditions in urban India<\/h3>

Many informal workers do not have decent living facilities in rapidly urbanising India. A typical example would be the living conditions of construction workers, who often seasonally migrate to big cities<\/a> and are forced to live on the streets or in makeshift tents at construction sites.<\/p>

4. Lack of formal sector benefits <\/h3>

Informal workers lack formal sector benefits<\/a> such as written contracts, salaried employment, and safe and non-exploitative working environments. Additionally, they face constant uncertainty about work not being available for a longer period and even unemployment.<\/p>

In an effort to address these challenges, the Ministry of Labour and Employment launched the e-Shram portal in 2021 for creating a database of informal workers across the country and linking them to important welfare and social security provisions. Currently, more than 30 crore workers are registered in the e-Shram portal. Once registered, workers can access various welfare schemes, including the Pradhan Mantri Shram Yogi Maandhan Yojana<\/a>, Pradhan Mantri Jeevan Jyoti Bima Yojana<\/a>, and Pradhan Mantri Suraksha Bima Yojana<\/a>. While the state encourages workers to register on the e-Shram portal, informal workers at the event indicated that they want the government to go beyond administrative processes and work on improving the social protection being offered to them. <\/p>

Unorganised workers’ welfare board: A possible solution?<\/h3>

The four new labour codes were introduced to rationalise existing labour laws by consolidating them under an umbrella legislation. According to the central government, this would help solve confusion related to the multiplicity of labour laws, while providing informal workers with much-needed social security and decent working conditions. The most significant code aimed at providing welfare to informal workers is the Code on Social Security, 2020<\/a>. Under this code, there is a clause stipulating the formation of a National Social Security Board and a State Unorganised Workers’ Welfare Board, which have been touted as critical to addressing the needs of unorganised workers. However, the Unorganised Workers Social Security Act, 2008<\/a>, already provided a similar mandate. Although it has been a decade and a half since the act was passed, these boards are yet to operate at full capacity or generate any meaningful impact. <\/p>

The governments of many states, including Gujarat<\/a> and Tamil Nadu<\/a>, have formed unorganised workers’ welfare boards. But my fieldwork in Gujarat revealed that the board has limited financial resources to formulate and implement welfare schemes. <\/p>

It is a mammoth task for state governments to operationalise state unorganised workers’ welfare boards and run welfare schemes for them. These are some of the challenges: <\/p>