The central government has taken a big step for the working women and single parent employees of the country. Under the new Labor Code rules, companies may now have to give crèche allowance every month to employees for the care of small children. This facility will be available to those employees whose children are below six years of age. The government believes that this will reduce the financial burden on working mothers and will help in increasing women’s job participation.
The Central Government has implemented the rules of the new Labor Code on 8 May 2026. This means that employees working in companies where these rules will be applicable will be able to get the benefits of the new labor code. A big benefit among these is crèche allowance. Under this, employees will get at least Rs 500 per month for each child. This facility will be provided to a maximum of two children and till the child is 6 years of age.
How much allowance will you get?
According to the rules, this crèche allowance will be at least Rs 500 per child per month. This facility will be available to a maximum of two children and the age of the children should be less than six years. This is especially expected to provide relief to working women, widowed employees and single parents. According to Lokesh Gulati, partner, PwC India, there is a provision in Rule 37(Viii)(b) that if crèche facility is not provided to an employee, then the organization can give crèche allowance every month instead. This rule will be applicable to those employees who are eligible to get crèche facility.
What is the new system?
Earlier, under the old labor laws, it was necessary for the companies to create only crèche facilities, but now the government has given two options to the companies. Firstly, they should provide crèche facility in their premises, or secondly, they should give monthly allowance to the employees. This will also provide relief to those companies where it is not practically possible to build a crèche. However, employees will not start getting this facility everywhere immediately. The reason for this is that many institutions have to follow the labor code rules of both the central and state governments. In such a situation, some employees may have to wait for these rules to be fully implemented.
Which companies will have to follow the Labor Code rules of the Central Government?
The new OSHWC Central Rules 2026 will be applicable to certain institutions. These include railways, mines, oil fields, major ports, air transport services, telecommunications, banking and insurance companies. Apart from this, Central Government owned public undertakings (PSUs), their subsidiaries, corporations and autonomous bodies will also come under the purview of these rules.
Also, these rules will also be applicable to the establishments of contractors working for such institutions, where the Central Government is considered the Appropriate Government. This step will encourage women to continue working. Often women have to leave their jobs to take care of small children. In such a situation, a facility like crèche allowance can prove to be helpful for them at both economic and social level.
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