If the Wage Code is about money and the IR Code is about power, the Occupational Safety, Health and Working Conditions (OSH) Code, 2020 is about operations.
It consolidates 13 old Acts including the Factories Act and the Contract Labour (CLRA) Act into one. The goal? To finally modernize workplace safety in India and drastically reduce the "License Raj" that has plagued manufacturing and operations for decades.
Here is what you need to know to keep your factory, office or warehouse compliant.
1. The "Big Ticket" Changes
The Old Way: You likely had separate licenses for Contract Labour, Inter-state Migrant Workmen and your Factory. It was a paperwork headache that required constant renewals.
The New Rule: You now apply for a single, all-encompassing Common License for the establishment.
Impact: A massive reduction in paperwork and renewal cycles. One application, one license, done.
The Old Way: Women were generally prohibited from working night shifts (7 PM to 6 AM) in factories or faced heavy restrictions.
The New Rule: Women are now allowed to work night shifts in all sectors including IT, manufacturing and logistics.
The Catch: You must have the employee's consent and you must provide safety and transportation (home pick-up/drop).
The Old Way: The Act applied if you had 20+ contract workers.
The New Rule: The threshold is raised to 50+ contract workers.
Impact: Smaller contractors are deregulated. But be careful because the "Principal Employer" liability for unpaid wages remains, so you still need to vet your vendors well.
2. The "Fine Print" (Small Changes, Big Impact)
Appointment Letters: This is now mandatory. You must issue a formal Appointment Letter to every employee (yes, including daily wagers and contract staff). Failure to do so is a punishable offence.
Leave Encashment: Employees can now encash unavailed leave at the end of the calendar year. Also, eligibility for leave starts after working 180 days (reduced from the old 240 days).
Free Health Check-up: Employers must provide a free annual health check-up for employees above a certain age (40 years).
Journey Allowance: If you employ Inter-State Migrant Workers, you must pay a lump sum "Journey Allowance" (to and fro fare) once a year for them to visit their hometown.
Core vs. Non-Core: Contract labour is prohibited in "Core Activities" unless there is a sudden spike in volume or the activity is ordinarily done through contractors.
3. Action Plan for Employers
Log in to the Shram Suvidha Portal (or your State’s equivalent).
Action: Migrate your existing CLRA and Factory licenses to the new OSH Code License. Don't wait for the deadline.
If you plan to employ women at night:
Action: You need a documented policy covering GPS-tracked cabs, CCTV monitoring and POSH compliance. Without this paperwork, operating night shifts is illegal.
Action: Add two new line items to your HR budget: Annual Health Check-up (for staff aged 40+) and Journey Allowance (for migrant workers).
4. Compliance Checklist
[ ] Contractor Audit: Even if the threshold is 50, verify that your contractors are paying PF/ESI. You are still on the hook as the Principal Employer.
[ ] Leave Policy: Update your HRMS logic to trigger leave eligibility at 180 days.
[ ] Safety Committee: Mandatory for establishments with 250+ workers (Factories/Mines). Ensure this committee is constituted and meets regularly.
Conclusion: The End of the Beginning
With the OSH Code, we have completed our journey through the "Great Labour Reset." From restructuring salaries under the Wage Code to managing unions under the IR Code and ensuring safety under OSH, the Indian HR landscape has completely transformed.
Compliance is no longer just about maintaining registers; it’s about strategic agility. The businesses that adapt their payroll, policies and operations to these new Codes today will be the ones that thrive in the competitive market of tomorrow.
Missed a part of the series? Catch up here:
Part 1: The Code on Wages, 2019
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