November 22, 2025: India has taken a major step to modernise its workforce framework by merging 29 labour laws into 4 labour codes, impacting over 400 million workers across sectors. The overhaul aims to simplify compliance for businesses while enhancing protections for employees in both formal and informal sectors.
The four labour codes: Code on Wages, Industrial Relations Code, Social Security Code, and Occupational Safety Code, introduce benefits such as work-from-home options, early gratuity for fixed-term employees, universal minimum wages, overtime pay, and free health check-ups.
Four Labour Codes Much Needed Change: Better Wages, Safety, Social Security & Enhanced Welfare for India’s Workforce
New Labour Codes on Wage: Fair Pay for All
This new labour code unveiled by the Government of India on Friday, consolidates previous wage-related laws and ensures:
- Universal Minimum Wage: All workers, in organised and unorganised sectors, are covered.
- Floor Wage: Minimum wage aligned with basic living standards; states cannot go below this.
- Equal Pay: Gender and identity-based discrimination in pay or employment is prohibited.
- Overtime Pay: Double wages for extra hours.
- Timely Payment: Employers are liable for delayed or deducted wages.
- Simplified Compliance: First-time minor offences attract fines instead of imprisonment.
Industrial Relations: Flexible and Transparent
Merging trade union and employment laws, these new labour codes focuses on modernising workplace relations:
- Fixed-Term Employment: Time-bound contracts now qualify for gratuity after one year.
- Remote Work: Work-from-home permitted in service sectors by mutual agreement.
- Layoff Thresholds Raised: States can approve layoffs up to 300 workers.
- Grievance Committees: Proportional representation for women to address workplace concerns.
- Strikes & Notices: 14-day notice required, mass casual leave included in strike definitions.
Social Security: Coverage for Everyone
The Social Security Code expands protections to formal, informal, gig, and platform workers:
- Gig and Platform Workers Included: Access to life, health, maternity, disability, and retirement benefits.
- Early Gratuity: Fixed-term employees eligible after one year.
- Accident Coverage: Travel-related incidents during commutes considered employment-related.
- National Fund: Supports unorganised and gig workers with social security benefits.
- EPF Reforms: Reduced appeal deposit and streamlined recovery processes.
Occupational Safety: Health and Protection
Focusing on workplace safety while maintaining business efficiency:
- Women at Work: Night shifts allowed with consent and safety measures.
- Annual Health Check-ups: Free medical screening for employees.
- Working Hours: Standard 8 hours/day; overtime requires consent and double pay.
- Migrant Worker Protections: Broader definition includes direct and contract-based employees.
- Safety Committees: Required for establishments with 500+ workers.
- Victim Compensation: Half of fines directed to affected employees or heirs.
Why It Matters
The Government of India has announced that the four Labour Codes – the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020 and the Occupational Safety, Health and Working Conditions Code, 2020 are being made effective from 21st November 2025, rationalising 29 existing labour laws.
By modernising labour regulations, enhancing workers’ welfare and aligning the labour ecosystem with the evolving world of work, this landmark move lays the foundation for a future-ready workforce and stronger, resilient industries driving labour reforms for Aatmanirbhar Bharat.
The new labour codes modernise India’s workforce regulations by combining simplified compliance, stronger worker protections, and flexible work options. They aim to formalise more jobs, promote gender equality, and expand social security, while helping businesses manage operations efficiently.
