Maharashtra’s labour rules draft signal a more digital, business-friendly compliance regime

Head, Compliance Advisory Practices, Core Integra, explains

PIONEER EDGE NEWS SERVICE

With Maharashtra republishing draft rules under all four Labour Codes and inviting stakeholder feedback, the state is moving closer to a new compliance framework that could reshape how businesses register, file returns, maintain records and manage inspections. The draft rules point to a more streamlined, digitised approach to labour law compliance, with possible implications for employers across large enterprises, MSMEs and the informal workforce. In this conversation, Munab Ali Beik, the head of Compliance Advisory Practices at Core Integra, explains what Maharashtra’s draft Labour Code rules indicate for businesses, the likely implementation timeline, the growing role of digital compliance and the potential impact on MSMEs, contract workers and the broader workforce.

With Maharashtra releasing draft rules and inviting stakeholder feedback, what does drafting of state rules means, what does it indicate & does it indicate early implementation readiness? What is a realistic timeline for enforcement once it is finalised?

As per the General Clauses Act, 1897, previous publication of Rules for inviting objections and suggestions is mandatory. Since the Labour Codes have been notified to come into effect from November 21, 2025, the State Governments have initiated the process of publishing the Rules framed thereunder.

The Central Government has advised the State Governments to align their Rules with the Labour Codes, as certain provisions in the earlier draft versions were inconsistent with the Codes. Accordingly, the State of Maharashtra has republished the draft Rules under all four Labour Codes for inviting objections and suggestions from stakeholders and the general public.

Any person, including an employer, owner, employee, trade union member, social worker, consultant, member of the public or any other interested person, who believes that any provision of the published draft Rules may affect them or who wishes to suggest improvements to the proposed Rules, may submit objections or suggestions to the designated authorities within 45 days from the date of publication.

Thereafter, the State Government will consider the objections and suggestions received and may notify the final version of the Rules. The final Rules may remain the same as the published draft Rules if no objections or suggestions are submitted, or if the submissions made are not accepted by the appropriate authorities. The final Rules are expected to be notified after the expiry of the 45 days period from the date of publication.    


While the Labour Codes are central laws, what specific changes could Maharashtra-based businesses expect regarding enforcement intensity, inspections or compliance culture compared to the rest of India?

The Labour Codes are Central Acts, though the power to frame Rules under these Codes has been vested in the respective State Governments. In exercise of the powers conferred under the Codes, the State of Maharashtra has published Draft Rules under all four Labour Codes.

The Draft Rules published by the State of Maharashtra clarify various procedural and compliance related aspects, including the jurisdiction of authorities, display of mandatory notices and information in Marathi and English languages, maintenance of registers in prescribed formats, the role of the Inspector-cum-Facilitator, timelines for obtaining registrations, prescription of fees for licences, filing of returns and other procedural requirements.

The State of Maharashtra appears to have adopted a business centric approach while framing these Rules, with the objective of aligning labour law compliance with business requirements. The Draft Rules address matters relating to working hours, rest intervals, overtime work, industrial dispute resolution mechanisms, grievance redressal, health and safety measures, certifications, exemptions and other compliance requirements.   

Implications for Tier II & III cities, MSMEs & emerging businesses (Businesses across non-metro regions of Maharashtra adapt to increased digitisation, documentation, and formalisation? Will this create friction in the short term, especially for MSMEs transitioning from informal setups?)

Yes, the Draft Rules published by the State of Maharashtra provide an option for maintaining registers and records in digital form. This initiative offers significant encouragement to establishments and businesses, particularly those operating in Tier II and Tier III cities, to adopt digital compliance mechanisms.

Further, the Draft Rules clarify that employers may produce digital records before the Inspector-cum-Facilitator at the time of inspection. Establishments and businesses operating in rural areas are also encouraged to maintain records digitally, thereby promoting technological adoption across all sectors.

The Rules additionally provide for online filing of applications for registration and issuance of registration certificates in digital form. Employers are also permitted to use digital signatures in records and documents wherever required. Even the display of notices is proposed to be maintained in digital mode, reducing dependence on the traditional physical display system.

These proposed changes represent a major initiative for business owners, especially in Tier II and Tier III cities, as they encourage a “Go Digital” culture in labour law compliance. From a business perspective, such measures are expected to improve operational efficiency, reduce paperwork and promote cost effective compliance management.

Daily Wage, Contract & Informal Workforce: Could the new rules accelerate formalisation of daily wage and contract workers in Maharashtra? What changes can employers and workers expect in wage structuring, documentation, and social security coverage?

The Labour Codes, particularly the Code on Wages, 2019, extend their applicability across almost all categories of employment in the country. The State of Maharashtra periodically notifies Minimum Wages for various scheduled employments, generally on a half-yearly basis in April and October. The notified Minimum Wages consist of the Basic Rate of Wages and the Cost of Living Allowance (Dearness Allowance – DA), classified according to the skill category of employees.

Under the Labour Codes, particularly the Code on Wages, 2019, the basic wages payable to an employee cannot be less than the notified Minimum Wages applicable to the category of employment within the State. The Code also provides clarity regarding the calculation of daily wages from the notified monthly wage rates and contains provisions relating to contract workers and workers engaged in the informal sector.

Further, the Labour Codes seek to extend social security coverage to daily wage workers, contract workers and unorganised workers engaged within the State. The Codes envisage broader social security protection for such categories of workers, who were traditionally outside the formal social security framework. In this regard, the State Government encourages registration of unorganised workers on the designated portal to enable them to avail social security benefits under the applicable schemes.

The Labour Codes also strengthen protections available to contract workers. In certain situations, where the contractor fails to fulfil statutory obligations, responsibility may extend to the Principal Employer for ensuring compliance with applicable benefits and welfare measures.

Overall, the implementation of the Labour Codes in the State of Maharashtra is expected to significantly enhance social security coverage and welfare protection for daily wage workers, contract workers, and unorganised workers operating within the State. 

Role of Technology in Bridging Compliance Gaps: How can businesses proactively adopt digital compliance tools to manage filings, registers and audits, particularly in a state that may move faster on enforcement?

The role of technology in the new era of labour law compliance is unavoidable. The State Government of Maharashtra has actively encouraged digital maintenance of registers and records and several procedural compliances proposed under the Draft Rules are intended to be maintained through online systems. The proposed changes under the Draft Rules require establishments to align their compliance mechanisms accordingly. Failure to maintain registers or records in the prescribed format may attract penal consequences, with a minimum penalty commencing from Rs 20,000 per offence under certain provisions of the Labour Codes.

In this evolving compliance environment, maintaining 100 percent compliance through technology driven solutions and industry expert support has become essential to avoid non-compliance and consequential penalties. Preparation and maintenance of registers and records in digital form can significantly reduce human errors, improve accuracy, and minimise compliance gaps.

Further, maintaining prescribed compliance checklists and compliance dashboards can provide organisations with a broader understanding of their compliance status and pending obligations. The use of compliance management tools integrated with regular updates on applicable legal changes would help businesses effectively sustain and maintain statutory compliance requirements.

Every business establishment may, therefore, need to adopt an appropriate compliance management system to identify applicable compliances, monitor due dates and track the status of statutory obligations. Even a minor lapse in compliance may result in substantial penalties and legal exposure for business owners and management. Accordingly, technological support has become increasingly important for organisations to reduce human error, ensure transparency and maintain effective labour law compliance.