Rule 185: 2% Raise Contractual Workers Can't Be

India's new labour codes include Rule 185, which makes a minimum 2% annual salary increment mandatory for contractual workers at central government establishments like railways and banks. Even if your contractor employer refuses, this raise is legally owed to you.

Here's what happened: Rule 185 under the new Central Government labour codes mandates a minimum 2% annual salary hike for regular contractual workers at central government-run establishments.. This applies to employees hired through contractors at institutions like Indian Railways, public sector banks, and other central government bodies — not to direct payroll employees.. The increment is compulsory by law — employers cannot opt out, skip it, or make it conditional on performance reviews..

What you should do: Check your employment contract to confirm whether you are a 'contractual worker' at a central government establishment — this determines if Rule 185 applies to you.. If you haven't received a 2% increment in the past year, raise a written grievance with your contractor employer and reference Rule 185 of the new labour code.. Use the extra income smartly — even ₹300–₹600/month added to a SIP or RD compounds meaningfully over 5–10 years rather than getting absorbed into daily expenses..

A 2% raise sounds small, but India's new labour codes also mandate linking wages to a Cost of Living Allowance — meaning your effective raise could be higher than 2% in high-inflation years. Ask your HR about both.