India: New Law Adds Protections for the Informal Workforce

A historic law, “Code on Wages 2019,” was passed by India’s Parliament in September. This law provides a uniform legislative approach to managing the large “informal” workforce in India, a group of workers with low pay, few benefits, and little job security. The new rules require companies to pay guaranteed minimum wages and provide universal social security to workers, while allowing companies to retain the flexibility to scale their businesses.

National committees and industry bodies are largely supportive of the new laws, citing the added protection for millions of displaced workers. At the same time, labor groups point out that the laws exempt tens of thousands of smaller firms and deprive workers’ rights to strike or receive benefits.

Takeaway: The Code on Wages was meant to protect workers and cut bureaucratic red tape that has long plagued India’s “informal” workforce. As companies continue to change so they can address evolving market demands, they may find themselves interacting with new laws that add protections for different classes of workers. Continued diligence will be needed for organizations to avoid conflicts with such regulations, and an expert talent adviser can help steer a course for engaging the right talent with minimum risk.

India: New Law Adds Protections for the Informal Workforce

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