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The government has officially implemented the four long-awaited Labour Codes—marking one of the biggest overhauls of India’s labour laws since Independence. These new codes were implemented on Friday, November 21, 2025, and replaced 29 older, fragmented laws. These new laws have introduced a uniform, modern, and worker-friendly framework intended to improve wages, safety, social security, and working conditions across all sectors.
These four codes which have been implemented include Code on Wages (2019), Industrial Relations Code (2020), Code on Social Security (2020), and Occupational Safety, Health & Working Conditions (OSH) Code (2020). Together, they aim to standardise labour protections, expand social security, improve wage practices, promote gender pay parity, and simplify compliance for employers.
The first code is the Code on Wages, which aims to simplify and promote uniformity in wage-related concerns. The four earlier laws related to minimum wages, payment of wages, bonus, and equal remuneration are consolidated under this.
Wages now include the Basic pay, the Dearness Allowance (DA), and the Retaining Allowance. But the wages will not include other elements like Bonus, House Rent Allowance (HRA), Travel Allowance, Gratuity, and Retrenchment compensation. Allowances cannot exceed 50% of total salary, meaning at least half the salary must be “wages.” Hence, this will result in the rise of social security contributions like EPF, ESI, bonus, and gratuity. Take-home salary may decrease, but long-term benefits increase.
For the first time, the central government has been empowered to set a national floor wage, which acts as the minimum wage across the country. States are not allowed to set minimum wages below this floor, ensuring a basic standard of living for workers nationwide and greater uniformity across regions. The exact level of the floor wage will be determined by a new expert committee.
Every employee—organised or unorganised—must receive at least the minimum wage notified by the government. Previously, minimum wages applied only to certain “scheduled employments.” The government must revise minimum wages every five years to ensure that wages keep pace with inflation and the cost of living.
The code also introduces strict timelines for wage payments. Employers must pay workers as follows: daily workers at the end of each shift, weekly workers before the weekly holiday, fortnightly workers within two days of the fortnight’s end, and monthly workers within seven days of the following month. In cases of resignation or termination, wages must be paid within two working days. Earlier, timely payment rules applied only to workers earning less than ₹24,000 per month.
The government can now regulate the number of working hours, setting a daily limit of 8 to 12 hours and a maximum of 48 hours per week. Companies have the flexibility to adopt 4-day, 5-day, or 6-day work weeks, provided the weekly working hours do not exceed the 48-hour limit. This allows businesses to better manage operational requirements while ensuring workers’ health and work-life balance.
Any work done beyond the normal working hours must be compensated at twice the ordinary wage. This ensures fair remuneration for extra work and discourages excessive overtime without proper pay.
The code prohibits gender-based discrimination in employment. Employers cannot discriminate in hiring, wage determination, or working conditions on the basis of gender, including transgender identity. Additionally, women workers are now allowed to work night shifts, provided they give consent and that proper safety measures are in place. This promotes gender equality and expands opportunities for women in the workforce.
Every employee is now entitled to receive wage slips, either digitally or in physical form. These slips must detail the employee’s earnings, deductions, allowances, and net pay, providing transparency and ensuring that employees have proof of their wages and benefits.
The Industrial Relations (IR) Code, 2020 consolidates and modernises laws related to trade unions, standing orders, and industrial disputes, creating a simpler framework for employer-employee relations. This is done by combining relevant provisions of older laws.
Under the new code, employers can hire workers on fixed-term contracts for a specified period. These FTE employees will enjoy the same wages and working conditions as permanent employees, ensuring parity in benefits and treatment. Additionally, FTE workers are now eligible for gratuity after just one year of service, instead of the earlier requirement of five years, providing greater financial security and flexibility for seasonal or project-based employment.
The code introduces stricter regulations for industrial action. Workers must now provide a 14-day notice before going on a strike or before a lockout occurs. Furthermore, even mass casual leave—when a large group of employees takes leave simultaneously—can now be treated as a strike.
Industrial establishments employing up to 300 workers can now lay off or retrench employees independently, up from the previous limit of 100. States have the flexibility to further increase this threshold. To support employees who are retrenched, employers are required to contribute an amount equivalent to 15 days’ wages for each retrenched worker. This fund is specifically meant for retraining and upskilling workers.
A trade union must have 51% membership to be recognised as the official “negotiating union” within an establishment. If no single union meets this threshold, a negotiating council is formed by unions that have at least 20% membership.
The IR Code broadens the definition of who qualifies as a “worker” and what constitutes an “industry.” The definition now explicitly includes journalists, sales promotion staff, and supervisory employees earning up to ₹18,000 per month. Additionally, the term “industry” now covers all systematic employer-employee activities.
The code formally recognises work-from-home arrangements for service-sector employees. To speed up dispute resolution, the code establishes two-member industrial tribunals comprising one judicial member and one administrative member.
The Code on Social Security, 2020 consolidates nine existing social security laws and significantly expands coverage to all workers, including those in the unorganised sector, gig economy, and platform-based employment. The objective is to create a uniform and comprehensive framework for social protection across India. It provides comprehensive social protection, covering life insurance, health, maternity, provident fund benefits, and disability coverage, ensuring that all workers have access to essential social security.
Under the new code, Employees’ State Insurance (ESIC) coverage has been expanded pan-India, removing the earlier restriction that applied only to “notified areas.” Similarly, the Employees’ Provident Fund Organisation (EPFO) provisions now apply to all establishments employing 20 or more employees, regardless of industry type. This replaces the earlier rule, where EPF applied primarily to manufacturing establishments listed under Schedule 1 of the EPF Act.
The code also streamlines EPF inquiries and appeals. EPF-related inquiries must be initiated within five years of an event and concluded within two years, with a possible one-year extension. Employers appealing EPFO orders are now required to deposit only 25% of the assessed amount, down from the earlier 40–70%, making compliance simpler while protecting workers’ rights.
For the first time, gig and platform workers—including employees of aggregators like Zomato, Swiggy, Ola, Uber, Amazon, and Urban Company—are explicitly included in social security schemes. The government will notify schemes covering life and disability insurance, accident coverage, health and maternity benefits, and crèche facilities, with funding partially or fully contributed by the Centre, states, or the aggregators themselves. Aggregators must contribute 1–2% of their annual turnover, with the total contribution not exceeding 5% of the amount payable by the aggregator.
The definition of wages under the code includes basic pay, dearness allowance, and retaining allowance, which ensures that social security contributions are calculated on a substantial portion of income. The definition of dependents has also been broadened to include maternal grandparents and, for female employees, parents-in-law, thereby extending coverage to a wider family network.
The code also ensures accident coverage during travel, meaning any accidents occurring while commuting between home and the workplace are now considered employment-related, making employees eligible for compensation. Additionally, fixed-term employees are now entitled to gratuity after one year of continuous service.
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The OSH Code, 2020 consolidates 13 existing laws related to occupational health, safety, and working conditions, aiming to provide a safer and more structured work environment while simplifying compliance for employers.
The code permits women to work in any sector, including night shifts before 6 a.m. and after 7 p.m., provided their consent is obtained and adequate transportation and safety arrangements are in place.
All employees are entitled to free annual health examinations, which aid in early detection of illnesses, reduce medical costs, and improve workforce productivity and overall well-being. This provision ensures that workers have access to preventive healthcare as part of their employment benefits. In cases of workplace accidents or injuries, courts can direct at least 50% of fines to the victims or their families, ensuring that employees or their dependents receive direct financial support.
Every employee must receive a written appointment letter specifying job designation, wages, benefits, and working conditions. This ensures transparency, accountability, and clarity in the employer-employee relationship.
The code broadens the definition of migrant workers to include those who move on their own, are recruited through contractors, or are directly employed across states. A national database for unorganised workers will be created to help them access employment opportunities.
The OSH Code sets the standard working hours at 8 hours per day and 48 hours per week. Any overtime requires worker consent and must be paid at double the normal wage, ensuring fair compensation and adherence to international labour standards.
Establishments of significant size must form safety committees to monitor and improve workplace safety. These include factories with 500 or more workers, construction establishments with 250 or more workers, and mines with 100 or more workers. They will include employer and worker representatives. [Rh]
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