Effective November 21, 2025, India brings into force four transformative Labour Codes that replace 29 central labour laws. These reforms mark one of the biggest overhauls in India’s labour ecosystem, aiming to simplify compliance, expand social security, ensure uniform wages, and modernise industrial

relations. 

The four new laws—Code on Wages, Code on Social Security, Industrial Relations Code, and the Occupational Safety, Health and Working Conditions (OSH) Code—are designed to make labour regulation simpler, faster, fairer, and aligned with the needs of a modern economy. 

Why Were the New Labour Codes Needed? 

For decades, India’s labour laws were criticised for being:

• Highly fragmented: 29 separate laws with overlapping provisions.
• Complex: Difficult compliance, especially for MSMEs.
• Outdated: Did not reflect new realities like gig work, platform work, flexible jobs, and digital workplaces.
• Uneven: Different rules across states created barriers to investment.
• Exclusionary: Many informal, gig, migrant, and home-based workers remained outside social security. 

The Labour Codes 2025 attempt to create a unified, simple, transparent, and worker-friendly system.

Code on Wages, 2019

Uniform Wages and Remuneration Across India

The Code on Wages merges four previous wage-related laws and creates a single national definition of “wages”. It ensures fair pay for all, irrespective of sector or skill type, strengthening employee rights in India. 

Key Changes

National Floor Wage

A National Floor Wage (NFW) becomes the baseline pay standard for all states. No state can fix minimum wages below this floor. 

New Wage Structure

Wages will include:

• Basic Pay
• Dearness Allowance
• Retaining Allowance

Allowances cannot exceed 50% of total wages, automatically raising PF, gratuity, and social security contributions. 

Timely Payment of Wages

Mandatory payment timelines:

• Daily workers: End of shift
• Weekly: Before weekly off
• Monthly: Within 7 days of next month
• Termination/resignation: Within 2 days 

Overtime Pay Rules

Overtime must be paid at twice the normal wage, and working hours cannot exceed 48 hours per week. 

Flexible Working Hours

Workdays may range between 8 to 12 hours with mandatory weekly limits. This supports flexible working hours for new-age sectors like IT, services, and e-commerce. 

Wage Slips Mandatory

Employers must provide electronic or physical wage slips, improving transparency. 

Code on Social Security, 2020

Universal Social Security Reforms

This code merges nine social security laws and extends welfare to gig workers, platform workers, contract staff, and unorganised workers—a historic move. 

Key Changes

Recognition of Gig & Platform Workers

For the first time in India’s labour law history, workers associated with apps and platforms—delivery partners, cab drivers, freelancers—get legal recognition. 

Social Security Fund

A national fund for unorganised and gig workers will be created, funded by:

• Central and state governments
• CSR contributions
• Aggregators (1–2% of annual turnover) 

EPFO & ESIC Coverage Expansion

• EPFO applicable to all establishments with 20+ workers, regardless of industry.
• ESIC becomes pan-India, not limited to notified areas.
• Even 1 worker in a hazardous industry must be covered under ESIC.
• Plantation owners can opt in voluntarily.

New Labour Codes Gratuity Rule

Fixed-term employees become eligible for gratuity after 1 year (earlier: 5 years for permanent staff).
This is one of the most important reforms in labour codes India.

Family Benefits Expanded

Definition of family includes parents-in-law of female employees (subject to income limits).

Inspector-cum-Facilitator System

Digital, transparent inspections replace arbitrary visits.

Industrial Relations Code, 2020

Modernising Hiring, Firing, and Industrial Harmony

This code merges three laws and introduces long-pending reforms in industrial relations.

Key Changes

Fixed-Term Employment (FTE)

Employers can hire workers for seasonal or short-term roles without using contractors. FTE workers will get:

• Same wages and benefits as permanent staff
• Gratuity after 1 year
• PF and ESIC benefits

Higher Threshold for Layoffs and Closure

Factories, mines, and plantations need government approval for layoffs only if they have 300+ workers (earlier: 100). Industry sees this as flexibility; unions see it as easing hire-and-fire.

Stricter Strike Rules

Workers cannot strike without:

• 60-day notice, and
• 14 days post-notice wait

Mass casual leave by >50% workers = strike.

Negotiating Union / Council

• Union with 51% membership becomes the negotiating union.
• If multiple unions, a negotiating council will be formed.

Helps faster dispute resolution.

OSH Code (Occupational Safety, Health and Working Conditions), 2020

Workplace Safety Regulations Strengthened

The OSH Code merges 13 laws and focuses on safety, health, transparency, and better working conditions.

 Major Reforms

Single Registration, Single License

Reduces compliance burden for employers.

Boosts ease of doing business.

 Higher Thresholds for Factory Licensing

• With power: from 10 → 20 workers
• Without power: from 20 → 40 workers

 Women Allowed in Night Shifts

With consent + safety measures, women can work after 7 pm in all sectors, including mines and hazardous industries.

Supports equal pay legislation and gender inclusion.

 Mandatory Appointment Letters

Every employee, including casual labour, must get an official appointment letter.

 Annual Health Check-Ups

Mandatory free health tests for workers aged 40+.

 Safety Committees

Compulsory for:

• Factories with 500+ workers
• Construction with 250+
• Mines with 100+

 Before vs After Labour Codes

Area	Before	After Labour Codes 2025
Employment Proof	Appointment letters not mandatory	Mandatory letters for all
Social Security	Gig & unorganised not covered	Universal social security
Minimum Wage	Only for scheduled industries	National Floor Wage applies to all
Working Hours	Inconsistent	Uniform 48-hour week; flexible days
Women in Workforce	Night shifts restricted	Allowed with safeguards
ESIC Coverage	Limited to notified areas	Pan-India, even single worker in hazardous jobs
Compliance	Multiple licences & forms	Single licence, single return

Benefits of Labour Codes for Different Worker Groups

Fixed-Term Employees

• Access to PF, ESIC, gratuity, leave
• Better job stability
• Reduced over-reliance on contractors 

Gig & Platform Workers

• Formal recognition
• Access to social security fund
• More predictable earnings

Contract Labour

• Fairer wages and protections
• Reduced exploitation
• Clear definition of core vs non-core work

Women Workers

• Night shift opportunities
• Equal pay guarantee
• Safer workplaces

MSME Workers

• Standardised wages
• Lower compliance burden for employers 

Plantation Workers

• ESIC coverage
• Better safety norms

Beedi & Cigar Workers

• Defined working hours
• Better pay conditions

Conclusion

The New Labour Codes 2025 mark a decisive shift toward a modern, equitable, and simplified labour regime in India. For workers, they ensure uniform wages, social security, workplace safety, and equal rights. For employers, they bring simplified compliance, flexible hiring options, and reduced regulatory burden. 

By unifying 29 old laws into four cohesive codes, India moves closer to a labour ecosystem that supports both economic growth and worker welfare, and strengthens the foundation of a futuristic, digitally enabled, and inclusive workforce.