Income inequality remains a pressing global issue, exacerbated by globalization, technological advancements, and fiscal policies. Labour policies play a crucial role in mitigating income disparities by ensuring fair wages, equitable employment opportunities, and social protections. However, their effectiveness and sustainability, particularly within private sector organizations, remain underexplored. This study examines the role of labour policies in addressing income inequality within private sector firms in Abuja Municipal Area Council, Nigeria. Through a comprehensive review of existing literature and empirical studies, the research evaluates the impact of labour policies on wage distribution, gender pay gaps, and overall income equity. Findings suggest that while policies such as minimum wage laws and collective bargaining contribute to reducing inequality, their long-term sustainability is hindered by economic pressures, weak enforcement, and socio-cultural barriers. The study highlights the need for stronger regulatory frameworks, inclusive policy design, and organizational commitment to equitable labour practices. By analyzing challenges and proposing policy recommendations, this research contributes to the discourse on sustainable labour policies and their role in fostering economic equity in Nigeria’s private sector.