diff --git a/sdk/contract.md b/sdk/contract.md
index 42102378..696d142f 100644
--- a/sdk/contract.md
+++ b/sdk/contract.md
@@ -26,6 +26,10 @@ WriteOutput writes the content to the specifies file at the path /kratix/output/
 
 WriteStatus writes the specified status to the `/kratix/metadata/status.yaml`
 
+**`WriteLabels(map[string]string) error`**
+
+WriteLabels writes the specified labels to the `/kratix/metadata/labels.yaml`. These labels will be merged with the existing resource labels after the pipeline completes.
+
 **`WriteDestinationSelectors([]DestinationSelector) error`**
 
 WriteDestinationSelectors writes the specified Destination Selectors to the `/kratix/metadata/destination_selectors.yaml`
@@ -70,6 +74,10 @@ PublishStatus updates the status of the provided resource with the provided stat
 
 ReadStatus reads the /kratix/metadata/status.yaml
 
+**`ReadLabels() (map[string]string, error)`**
+
+ReadLabels reads the /kratix/metadata/labels.yaml
+
 ## Promise Interface
 
 The SDK interface implements the core functions for interacting with a Promise
diff --git a/work-creator/cmd/update_status.go b/work-creator/cmd/update_status.go
index ade29fa1..f54051a4 100644
--- a/work-creator/cmd/update_status.go
+++ b/work-creator/cmd/update_status.go
@@ -16,7 +16,7 @@ import (
 func updateStatusCmd() *cobra.Command {
 	cmd := &cobra.Command{
 		Use:   "update-status",
-		Short: "Update status of Kubernetes resources",
+		Short: "Update status and labels of Kubernetes resources",
 		RunE: func(cmd *cobra.Command, args []string) error {
 			ctx := context.Background()
 			return runUpdateStatus(ctx)
@@ -29,6 +29,7 @@ func updateStatusCmd() *cobra.Command {
 func runUpdateStatus(ctx context.Context) error {
 	workspaceDir := "/work-creator-files"
 	statusFile := filepath.Join(workspaceDir, "metadata", "status.yaml")
+	labelsFile := filepath.Join(workspaceDir, "metadata", "labels.yaml")
 
 	params := helpers.GetParametersFromEnv()
 
@@ -44,6 +45,32 @@ func runUpdateStatus(ctx context.Context) error {
 		return fmt.Errorf("failed to get existing object: %w", err)
 	}
 
+	// Handle labels update
+	incomingLabels, err := readLabelsFile(labelsFile)
+	if err != nil {
+		return fmt.Errorf("failed to load incoming labels: %w", err)
+	}
+
+	if len(incomingLabels) > 0 {
+		existingLabels := existingObj.GetLabels()
+		if existingLabels == nil {
+			existingLabels = map[string]string{}
+		}
+		mergedLabels := lib.MergeLabels(existingLabels, incomingLabels)
+		existingObj.SetLabels(mergedLabels)
+
+		if _, err = objectClient.Update(ctx, existingObj, metav1.UpdateOptions{}); err != nil {
+			return fmt.Errorf("failed to update labels: %w", err)
+		}
+
+		// Re-fetch the object after labels update to get the latest resourceVersion
+		existingObj, err = objectClient.Get(ctx, params.ObjectName, metav1.GetOptions{})
+		if err != nil {
+			return fmt.Errorf("failed to get existing object after labels update: %w", err)
+		}
+	}
+
+	// Handle status update
 	existingStatus := map[string]any{}
 	if existingObj.Object["status"] != nil {
 		existingStatus = existingObj.Object["status"].(map[string]any)
@@ -84,3 +111,17 @@ func readStatusFile(statusFile string) (map[string]any, error) {
 	}
 	return incomingStatus, nil
 }
+
+func readLabelsFile(labelsFile string) (map[string]string, error) {
+	incomingLabels := map[string]string{}
+	if _, err := os.Stat(labelsFile); err == nil {
+		incomingLabelsBytes, err := os.ReadFile(labelsFile)
+		if err != nil {
+			return nil, fmt.Errorf("failed to read labels file: %w", err)
+		}
+		if err := yaml.Unmarshal(incomingLabelsBytes, &incomingLabels); err != nil {
+			return nil, fmt.Errorf("failed to unmarshal incoming labels: %w", err)
+		}
+	}
+	return incomingLabels, nil
+}
diff --git a/work-creator/lib/status_updater.go b/work-creator/lib/status_updater.go
index f4ac7d77..6cdc421f 100644
--- a/work-creator/lib/status_updater.go
+++ b/work-creator/lib/status_updater.go
@@ -19,6 +19,25 @@ func MergeStatuses(existing map[string]any, incoming map[string]any) map[string]
 	return mergeRecursive(existing, incoming)
 }
 
+// MergeLabels takes two label maps and returns a new label map that is a
+// merge of the two. If a key exists in both maps, the value from the incoming
+// map will be used.
+func MergeLabels(existing map[string]string, incoming map[string]string) map[string]string {
+	result := make(map[string]string)
+
+	// First, copy all keys from existing
+	for k, v := range existing {
+		result[k] = v
+	}
+
+	// Then merge or overwrite with incoming
+	for k, v := range incoming {
+		result[k] = v
+	}
+
+	return result
+}
+
 // MarkAsCompleted takes a status map and returns a new status map with the
 // "ConfigureWorkflowCompleted" condition set to true. It will also update the
 // "message" field to "Resource requested" if the message is currently
diff --git a/work-creator/lib/status_updater_test.go b/work-creator/lib/status_updater_test.go
index 9c7d7f29..b1af3efe 100644
--- a/work-creator/lib/status_updater_test.go
+++ b/work-creator/lib/status_updater_test.go
@@ -9,6 +9,53 @@ import (
 
 var _ = Describe("StatusUpdater", func() {
 
+	Describe("MergeLabels", func() {
+		It("merges the two maps", func() {
+			existing := map[string]string{
+				"existing-key": "existing-value",
+				"shared-key":   "old-value",
+			}
+			incoming := map[string]string{
+				"incoming-key": "incoming-value",
+				"shared-key":   "new-value",
+			}
+			result := lib.MergeLabels(existing, incoming)
+			Expect(result).To(SatisfyAll(
+				HaveKeyWithValue("existing-key", "existing-value"),
+				HaveKeyWithValue("incoming-key", "incoming-value"),
+				HaveKeyWithValue("shared-key", "new-value"),
+			))
+			Expect(result).To(HaveLen(3))
+		})
+
+		It("returns incoming labels when existing is empty", func() {
+			existing := map[string]string{}
+			incoming := map[string]string{
+				"key1": "value1",
+				"key2": "value2",
+			}
+			result := lib.MergeLabels(existing, incoming)
+			Expect(result).To(Equal(incoming))
+		})
+
+		It("returns existing labels when incoming is empty", func() {
+			existing := map[string]string{
+				"key1": "value1",
+				"key2": "value2",
+			}
+			incoming := map[string]string{}
+			result := lib.MergeLabels(existing, incoming)
+			Expect(result).To(Equal(existing))
+		})
+
+		It("returns empty map when both are empty", func() {
+			existing := map[string]string{}
+			incoming := map[string]string{}
+			result := lib.MergeLabels(existing, incoming)
+			Expect(result).To(BeEmpty())
+		})
+	})
+
 	Describe("MergeStatuses", func() {
 		It("merges the two maps", func() {
 			existing := map[string]any{