Labour Codes can significantly boost women's workforce participation in India: Report

India's ambitious new Labour Codes, slated for implementation from November 2025, represent a monumental shift in the country's regulatory framework for employment. This reform is particularly significant for women, with a stated aim to substantially boost their participation in the workforce. To truly grasp its implications, one must delve into the historical context, the specifics of the changes, and their potential ripple effects across Indian society and economy.

Historically, India's labour laws were a complex web of over 200 state and 40 central legislations, often criticized for being archaic, rigid, and creating compliance burdens for businesses, while sometimes failing to adequately protect workers in the informal sector. This fragmentation also led to inconsistencies and challenges in enforcement. The need for reform was felt for decades, driven by the desire to improve ease of doing business, attract investment, and formalize the economy, while simultaneously ensuring worker welfare. The four new Labour Codes – the Code on Wages, 2019; the Industrial Relations Code, 2020; the Code on Social Security, 2020; and the Occupational Safety, Health and Working Conditions Code (OSH Code), 2020 – were enacted to consolidate and simplify these numerous laws.

For women, the reforms are particularly transformative. India has one of the lowest female Labour Force Participation Rates (LFPR) globally, which has seen a declining trend over the past few decades, though recent data shows some improvement. Reasons for this low participation are multifaceted, including societal norms, safety concerns, lack of suitable job opportunities, and the disproportionate burden of care work. The new codes directly address many of these barriers. The OSH Code, for instance, is pivotal. It removes previous restrictions on women working in certain hazardous industries or during night shifts, provided their safety, security, and transport are ensured by the employer. This opens up a plethora of sectors previously closed to women, allowing for greater career choices and economic independence. The code also mandates provisions like adequate sanitation facilities, crèches (for establishments with 50 or more workers), and ensures a safe working environment, which are crucial for retaining women in the workforce.

The Code on Social Security is another game-changer. It subsumes the Maternity Benefit Act, 1961, and extends social security benefits, including maternity benefits, to a wider array of workers, crucially including gig and platform workers. This is vital as many women are increasingly engaged in the gig economy, often without traditional employer-employee benefits. By bringing them under the social security umbrella, the code offers a safety net that encourages more women to participate in this flexible work arrangement without sacrificing crucial benefits. Furthermore, the Code on Wages, 2019, reinforces the principle of equal remuneration for equal work, building on the Equal Remuneration Act, 1976, and aligning with constitutional mandates.

Key stakeholders in this reform include the Central and State Governments, who are responsible for drafting rules and implementation; employers and industry associations, who seek clarity and ease of compliance; trade unions, who represent worker interests; and most importantly, women workers themselves, who stand to gain from enhanced protections and opportunities. Gig platforms are also now key stakeholders, as they bear new responsibilities for contributing to the social security of their workers.

The significance for India is profound. Economically, increasing women's workforce participation can significantly boost India's GDP. Studies by organizations like the IMF and McKinsey have indicated that India could add trillions to its GDP by achieving gender parity in the workforce. Socially, it's a step towards greater gender equality and empowerment, challenging patriarchal norms and providing women with greater agency over their lives and finances. Politically, it signals the government's commitment to inclusive growth and leveraging India's demographic dividend. These reforms resonate with the Directive Principles of State Policy in the Indian Constitution, particularly Article 39(d) which mandates equal pay for equal work for both men and women, and Article 42, which calls for just and humane conditions of work and maternity relief. Article 14 (equality before law) and Article 15 (prohibition of discrimination on grounds of sex) also underpin these legislative efforts.

Looking ahead, the future implications are vast. While the codes lay a strong foundation, successful implementation will depend on the framing of state-specific rules, effective enforcement mechanisms, robust awareness campaigns for both employers and employees, and the creation of supporting infrastructure like affordable childcare. There might be initial resistance or challenges in compliance, especially for smaller businesses and gig platforms. However, if effectively implemented, these codes have the potential to not only formalize a significant portion of the workforce but also to fundamentally alter the landscape of women's employment in India, leading to greater economic independence, reduced gender inequality, and a more robust and inclusive economy.