Labour codes must look at the invisible workers

The government’s decision to bring the four consolidated labour codes into effect from 21 November 2026 marks the most significant overhaul of India’s labour law framework in decades. The Centre has notified the Code on Wages (2019), Industrial Relations Code (2020), Social Security Code (2020) and the Occupational Safety, Health and Working Conditions Code (2020). The government has declared that the four labour codes will now take effect, a step that replaces old rules on factories and workers. A press release from the Ministry of Labour and Employment notes that the labour codes aim to provide “Better Wages, Safety, Social security & enhanced welfare for India’s workforce.”

The provisions extend the right to minimum wages to workers in both the organised and unorganised sectors, while also expanding social-security access to a much larger share of the unorganised workforce. However, most trade unions across the country are protesting these laws. Unions claim that these laws are anti worker since they will enable easier hiring and firing practices. Companies with up to 299 employees can now lay off staff without the approval of the government. This threshold previously was at 100. Unions claim that this shift alters the balance of power at the workplace in favour of employers. An additional concern is the implementation of these policies. Translating these provisions into practice will not be straightforward in a country where an overwhelming majority of the workforce is employed as informal workers.

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The limits of the new framework appear more sharply in sectors whose employment patterns lie outside the assumptions that guide the codes. For instance, the press release from the Ministry of Labour & Employment claims that beedi and cigar workers will now receive minimum wages, an 8-12 hour workday within a 48-hour week, and overtime only with consent at twice the normal rate. It also mandates timely wage payments and extends bonus eligibility to anyone who has completed 30 days of work in a year. Estimates place the beedi workforce between seven and eight million once leaf collection and trading are included.

According to a study based on NSSO data, 96 per cent of all beedi workers are home-based and only 4 per cent work in factories; 84 per cent of these home-based workers are women. They work within long subcontracting chains that deliver raw materials to their homes and collect finished beedis in return for piece-rate payments. Most live in rural areas with low literacy and limited mobility, and they typically have no written contracts or employment records. In the absence of documentation, enforcement agencies cannot verify work duration, delays in payment or eligibility for bonuses, making the workforce largely invisible to the law.

Women and children are heavily employed in the process of collection of leaves and rolling the beedis. These women are generally home -based workers who are connected to the larger production chain through the subcontractors. Subcontractors or mahajans supply the leaves, tobacco and thread, and then pay workers by output. The rate at which these workers are paid is not uniform and can vary greatly among and even within states. Increase in competition can create a race to the bottom where these workers are paid very low rates. When workers are paid at piece rate, implementing a policy which caps the working day is not very meaningful. Piece rate, as a process, incentivises workers to produce more and increase their working day.

This process has been historically used to bypass legally mandated working hours. The organisation of production and the labour process involved in the process of beedi making needs to be taken into cognizance for policies to significantly impact these sectors. Past laws illustrate the difficulty in implementing policies to improve the working conditions of beedi workers. The Beedi and Cigar Workers (Conditions of Employment) Act, 1966 and the Beedi Workers Welfare Fund Act, 1976 aimed to regulate working conditions and require employers to issue identity cards and maintain registers. These obligations rarely entered practice. Only around 15 per cent of workers are unionised today.

Workers often lack written contracts, wage slips or proof of days worked. Legal entitlements that depend on documentation – such as timely wages or bonus eligibility – remain difficult to claim in the absence of records. The organisation of production also changed in response to these earlier laws. Beedi rolling moved from factories to homes, partly to avoid compliance with labour legislation. When obligations increase without corresponding administrative reach, industries often alter their structure in ways that place workers further out of sight. The same outcome may arise under the new codes. The Occupational Safety, Health and Working Conditions Code states that it secures the interests of beedi and cigar workers.

However, inspection and safety norms depend on identifiable workplaces. Beedi rolling happens inside private homes scattered across large rural areas. There is no establishment where inspectors can verify hours, safety conditions or compliance with wage rules. Effective labour policy ultimately depends on implementation, not just legislation. India’s experience with child labour and manual scavenging shows that prohibitions fail when enforcement cannot reach the sites where violations occur. A similar challenge arises in the beedi sector. Production systems like beedi rolling have long reorganised themselves to avoid regulation, and a uniform labour code that ignores such realities will miss most of the workforce it intends to protect.

Many unorganized workers, similar to beedi rollers, lack clear work locations and formal employer-employee relationships. This invisibility means it is unclear whether they will receive any of the protections the labour reforms promise. Unless the state builds mechanisms that can reach these sites of production, and does so in negotiation with worker organisations, the new labour codes will struggle to change the conditions of those they claim to protect.

(The writers teach at, respectively, Christ University, Bangalore and the Institute of Management Technology, Hyderabad.)