A big gift for working parents: Under new labor laws, they will receive monthly payments for childcare!

The central government has taken a major step to protect working women and single-parent employees in the country. Under the new labor code, companies may now be required to provide employees with a monthly crèche allowance for the care of young children. 

This benefit will be available to employees with children under the age of six. The government believes this will ease the financial burden on working mothers and help increase women's employment.

The Central Government has implemented the new Labor Code on May 8, 2026. This means that employees working in companies where these rules apply will be able to avail themselves of the benefits of the new Labor Code. 

One major benefit is the crèche allowance, which provides employees with a minimum of Rs 500 per month for each child. This benefit will be provided for up to two children and until the child reaches the age of six.

How much allowance will you get

According to the rules, this crèche allowance will be a minimum of ₹500 per child per month. This benefit will be available to a maximum of two children, and the children must be under six years of age. 

This is expected to provide relief, especially to working women, widowed employees, and single parents. According to Lokesh Gulati, Partner at PwC India, Rule 37(Viii)(b) provides that 

if an employee is not provided with a crèche facility, the organization may provide a monthly crèche allowance in lieu of the facility. This rule applies to employees who are eligible for the crèche facility.

What is the new system

Previously, the old labor laws only required companies to establish crèches. However, the government has now given companies two options: first, they can provide crèches on their premises, or second, they can provide a monthly allowance to employees. 

This will also provide relief to companies where crèches are not practically possible. However, this benefit will not be available to employees everywhere immediately. 

This is because many organizations must comply with both the central and state government labor code regulations. Therefore, some employees may have to wait for these rules to be fully implemented.

Which companies will have to follow the Labour Code rules of the Central Government?

The new OSHWC Central Rules 2026 will apply to certain entities, including railways, mines, oil fields, major ports, air transport services, telecommunications, banking and insurance companies. 

Furthermore, central government-owned public sector undertakings (PSUs), their subsidiaries, corporations, and autonomous bodies will also be covered under these rules.

Additionally, these rules will also apply to contractors working for institutions where the Central Government is considered the Appropriate Government.