Most HR managers I speak to can quote PF deduction deadlines without blinking. They know the Shops Act notice period by heart. But ask them what their legal obligations are toward a migrant worker who packed up from Bihar on his own and found a job at their plant and the room goes quiet. That silence is now a liability.

India's four new Labour Codes came into force on November 21, 2025. The rules covering inter-state migrant workers have been completely rewritten stricter, broader, and far easier for inspectors to act on than anything that existed under the old 1979 law.

This guide is for employers, HR teams, compliance officers, and contractors who need to understand exactly what the law requires, in plain language, with every obligation traced back to the actual provision of the relevant code.

1. What Replaced the Old Migrant Worker Law?

For over four decades, the Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979 commonly called ISMA was the governing law for migrant workers in India.

ISMA had one major blind spot: it only protected workers who were formally recruited and sent across state lines by contractors. A worker who packed up on their own and moved to a different city to find work which is how the majority of India's migrant workforce actually operates had no legal protection at all.

The COVID-19 pandemic exposed this gap in the most painful way possible. When millions of workers were stranded on highways with no money and no food, it became impossible to ignore how badly the framework had failed.

The new Labour Codes correct this, and go much further. Today, inter-state migrant workers are governed by two codes:

The Occupational Safety, Health and Working Conditions Code, 2020 (OSHWC Code) — Chapter XI, Part-II, Sections 59 to 65, covers employer obligations on registration, allowances, welfare, and documentation.
The Code on Social Security, 2020 (CSS) — Recognises inter-state migrant workers under Section 2(60) and enables their registration and social security coverage through the national database and welfare scheme provisions.

The old ISMA stands repealed. These two codes govern the field entirely.

2. Who Counts as an Inter-State Migrant Worker Now?

This is where most employers get tripped up, because the answer is much wider than people expect. Under Section 2(zf) of the OSHWC Code, 2020, a worker qualifies as an inter-state migrant worker under either of two categories:

Category A

Contractor-Recruited Workers

A worker who was recruited by an employer or contractor from one state to work in an establishment in a different state. This definition existed under ISMA and continues under the new law.

Category B — New Addition

Self-Migrants

A worker who moved independently without any contractor or employer facilitating the move from one state to another for work, and who earns up to ₹18,000 per month. This category did not exist under ISMA. It is the single most significant change in the new framework.

There is one more nuance worth noting: a self-migrant who later changes their employer within the destination state also retains full protected status under this category.

📌 Practical Example

Say you have a worker at your plant who came from Bihar on his own, found the job through a local contact, and has been working for two years at ₹15,000 a month. Under ISMA, he had no legal protections. Under the new code, he is a fully covered migrant worker with every right and entitlement that status carries.

If your company has not re-mapped its workforce through this new definition, you have almost certainly undercounted your migrant worker population and your compliance obligations.

3. Does Your Company Fall Under These Rules?

The inter-state migrant worker chapter applies to any establishment that employed 10 or more inter-state migrant workers at any point during the preceding 12 months [Section 59, OSHWC Code, 2020].

The old threshold under ISMA was 5 workers. The new threshold is 10. But this does not make compliance easier to sidestep. Because the definition now captures self-migrants, far more establishments fall under the law than ever did before.

⚠️ The 12-Month Lookback Matters

The law does not ask how many migrant workers you employ today. It asks whether you employed 10 or more at any point in the last year. A construction site that brought in 15 migrant workers for three months and then released them is still a covered establishment.

4. What Are Employers Required to Do?

Here is the complete breakdown of employer obligations under the new framework every item tied to the exact provision that creates it.

(i) Register Your Establishment — Online Only

Every covered employer must electronically register their establishment with the appropriate government authority on the prescribed online portal within 60 days from the applicability of this code. Paper filings are no longer accepted.

Section 3, OSHWC Code, 2020

(ii) Notify Authorities Every Time You Hire Migrant Workers

Whenever you engage inter-state migrant workers, you must inform the relevant government official by submitting the prescribed online form within the stipulated time. This is separate from establishment registration.

Rule 13, OSHWC Rules, 2026

(iii) Pay Annual Journey Allowance Every Year

Once a year, the employer must pay every inter-state migrant worker a lump-sum equivalent to the fare for a complete return journey from the place of employment back to their home state. Workers who have served not less than 180 days in the preceding twelve months are eligible, covering not less than Class II sleeper train, bus, or any other mode of passenger transport.

Section 61, OSHWC Code, 2020 · Rule 102

📋 Important Note on Displacement Allowance

The 2019 draft Code had proposed a one-time displacement allowance of 50% of monthly wages payable before travel. This provision was removed in the final OSHWC Code, 2020. It does not form part of the current law. The annual journey allowance described above is the financial obligation that remains.

(iv) Equal Wages — No Differential Pay Based on Origin

A migrant worker doing the same job as a locally hired worker must receive identical wages and benefits. Paying a migrant worker less based on where they come from is not a grey area — it is a statutory violation.

Section 60(iii), OSHWC Code, 2020

(v) ESI and EPF Coverage from Day One

All inter-state migrant workers are eligible for ESI and EPF coverage from the very first day of employment. There is no probationary waiting period.

Section 60(iii), OSHWC Code, 2020

(vi) Welfare Obligations: Medical Care and Safety

Safe working conditions, comparable to those available to other workers in the same establishment, are mandatory. Free annual health examinations are specifically mandated for workers aged 45 and above in prescribed industries sach as factories, mines, plantations, and hazardous processes.

Section 60(i) & (iii), OSHWC Code, 2020

(vii) Verify Your Contractor's Pan-India Licence

Under the new code, contractors can obtain a single pan-India licence valid for five years, replacing state-by-state licensing. Verifying that your contractor holds this licence is your responsibility as the principal employer.

Section 48, OSHWC Code, 2020

(viii) Maintain Registers — Available for Inspection Without Prior Notice

Every employer must maintain a register covering all inter-state migrant workers, including home address, nature of work, wages paid, journey allowance paid, and ESI/EPF enrolment status. An Inspector-cum-Facilitator can ask to see this register at any time without prior notice.

Section 33, OSHWC Code, 2020

(ix) Ration Portability — Know the Right

The appropriate government is required to allow migrant workers to access their Public Distribution System (PDS) benefits in either their home state or destination state. While this is a government obligation, helping workers access it reflects a responsible and compliant workplace.

Section 62(a), OSHWC Code, 2020

5. The 10-Step Compliance Checklist

Run this as a quick internal audit of where your establishment stands.

#	Action	Legal Basis
1	Re-map your workforce — include self-migrants earning ≤ ₹18,000/month in your migrant worker count	Section 2(zf), OSHWC Code
2	Confirm whether you had 10+ such workers at any point in the past 12 months	Section 59
3	Complete online establishment registration if not already done	Section 3
4	File fresh notification to authorities on each new migrant induction	Rule 13
5	Set up an annual journey allowance calculation and disbursement process	Section 61 · Rule 102
6	Confirm that migrant workers earn equal wages for equal work	Section 60(iii)
7	Enrol migrant workers in ESI and EPF from their first day	Section 60(iii)
8	Arrange medical check-up facilities (age 45+ mandatory), safe housing, and protective gear	Section 60(iii)
9	Verify contractor holds pan-India, 5-year licence	Section 48
10	Maintain fully updated migrant worker registers — ready for inspection without notice	Section 33

6. Penalties for Non-Compliance

The new Labour Codes have made the cost of getting this wrong significantly higher than before.

Scenario	Penalty	Provision
General violation	Not less than ₹2,00,000, extendable to ₹3,00,000. Plus ₹2,000/day for each continuing day after conviction.	Section 94, OSHWC Code
Violation causing death	Imprisonment up to 2 years, or fine up to ₹5,00,000, or both.	Section 103, OSHWC Code
Non-maintenance of registers / non-filing of returns	Not less than ₹50,000, extendable to ₹1,00,000. For repeat violation: not less than ₹50,000, extendable to ₹2,00,000.	Section 96, OSHWC Code
Compounding (fine only)	Payable at 50% of maximum fine — first offence.	Section 114(1)(a), OSHWC Code
Compounding (imprisonment + fine)	Payable at 75% of maximum fine — at authority's discretion, not a guaranteed right.	Section 114(1)(a), OSHWC Code

Beyond the Fine

Non-compliant establishments are flagged in the national digital inspection system. That record has downstream consequences on licence renewals, on eligibility for government contracts, and on your ability to attract quality contractors. A fine gets paid and eventually forgotten. A compliance record does not.

7. Frequently Asked Questions

Q1. What is the definition of an inter-state migrant worker under the new Labour Codes?

A worker employed by an employer or contractor across state lines, or who travels by himself/herself from one state to another for the purpose of employment and earns up to ₹18,000 per month.

Q2. How many migrant workers must a company employ for these rules to apply?

These obligations apply if you employed 10 or more inter-state migrant workers at any point in the past 12 months.

Q3. Is there a displacement allowance under the new law?

No. The displacement allowance (50% of monthly wages at the time of recruitment) was proposed in the 2019 draft Code but was removed from the final OSHWC Code, 2020. The financial obligation that remains is the annual journey allowance.

Q4. What is the journey allowance?

A yearly lump-sum fare the employer pays to every migrant worker for a return trip between their workplace and their home state, once in 12 months. Eligibility requires a minimum of 180 days of service in the preceding twelve months. Travel class is not less than Class II sleeper rail or equivalent bus transport.

Q5. Do migrant workers get ESI and EPF from their first day?

Yes. There is no minimum tenure or probation period. Coverage begins on day one.

Q6. Are self-migrants covered under the new law?

Yes. Workers who moved on their own initiative and earn up to ₹18,000 per month are fully covered — a major departure from ISMA, which only applied to contractor-recruited workers.

Q7. What records must employers maintain for migrant workers?

A register of each worker showing home address, kind of work, wages paid, journey allowance paid, and ESI/EPF enrolment data — available on demand for inspection at any time without prior notice.

Q8. What are the consequences of non-compliance?

A penalty of between ₹2,00,000 and ₹3,00,000, plus ₹2,000 per day for continuing violations. Where a violation causes a worker's death, fines can reach ₹5,00,000 with potential imprisonment of up to two years.

Q9. Can contractors use a single licence for all states?

Yes. A single pan-India contractor licence valid for five years is now available, replacing the earlier requirement for state-by-state licensing.

Q10. When did the new Labour Codes come into force?

The OSHWC Code and the Code on Social Security, along with the other two Labour Codes, came into force on November 21, 2025, replacing the Inter-State Migrant Workmen Act, 1979.

Q11. Are employers required to register online?

Yes. Paper filings are no longer accepted. Electronic registration on the prescribed government portal is mandatory.

Q12. Can migrant workers use their ration card in the state where they work?

Yes. The law requires the government to enable PDS access in either the home state or the destination state.

About Praans Consultech

Praans Consultech is a labour law and HR compliance firm headquartered in Gurugram. We work with manufacturers, construction companies, infrastructure firms, and staffing agencies across India to build compliance systems that hold up under scrutiny, not just on paper.

Our practice under the new Labour Codes covers establishment registration under the OSHWC Code, journey allowance systems, ESI and EPF tracking for migrant workers, contractor licence verification, register maintenance, and full advisory on the OSHWC Code, Code on Social Security, Wage Code, and Industrial Relations Code.

If you are not certain where your establishment stands, a compliance health check is the right place to start. : www.praansconsultech.com

Disclaimer: The views expressed in this article are for general informational purposes only and reflect our understanding of the subject matter. They do not constitute legal advice or a formal legal opinion. For case-specific guidance or accurate compliance support, please contact us at info@praansconsultech.com

Inter-State Migrant Worker Rules in India (2026)

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