November 22, 2025: India has overhauled its labour codes framework by merging 29 existing laws into four comprehensive labour codes, a move expected to impact more than 400 million workers across the country. The reforms aim to modernise labour regulations, streamline compliance for businesses, and strengthen protections for employees across sectors.
The four codes include the Code on Wages, Industrial Relations Code, Social Security Code, and Occupational Safety, Health and Working Conditions Code. Together, they cover wages, employment conditions, social security, and workplace safety.
Labour Codes Overhaul Explained: WFH, Minimum Wages, Gratuity
Simplifying Wages and Pay
The Code on Wages consolidates multiple wage-related laws, including the Minimum Wages Act and the Equal Remuneration Act. Under the new rules:
- Minimum wages now cover all workers in both organised and unorganised sectors.
- A floor wage ensures that no state sets salaries below a minimum living standard.
- Gender equality is enforced, including equal pay for similar work regardless of gender or transgender identity.
- Employees are entitled to double pay for overtime, and timely payment is now mandatory.
- Minor first-time offences for employers are handled with fines instead of imprisonment, easing compliance hurdles.
This code is designed to make wages fairer, protect workers’ rights, and reduce disputes around pay.
Modernising Industrial Relations
The Industrial Relations Code streamlines laws governing trade unions, employment conditions, and industrial disputes. Key changes include:
- Fixed-term employment now comes with gratuity eligibility after one year.
- Work-from-home arrangements are officially allowed in service sectors through mutual agreement.
- The threshold for layoffs requiring government approval has been raised to 300 employees, with states allowed to adjust further.
- Grievance committees must include proportional representation for women, supporting gender-sensitive dispute resolution.
- Employers and workers must now give a 14-day notice before strikes, and mass casual leave is included in strike definitions to prevent sudden shutdowns.
These measures aim to foster transparency, fairness, and dialogue in workplaces.
Expanding Social Security Coverage
The Social Security Code extends benefits to formal, informal, gig, and platform workers. Key provisions include:
- Gig and platform workers are now included for health, maternity, disability, and retirement benefits.
- Fixed-term employees qualify for gratuity after one year of service.
- Accidents during travel between home and workplace are considered work-related for compensation.
- A social security fund is established for unorganised and gig workers.
- Employers appealing EPF decisions now deposit only 25% of the assessed amount, down from earlier levels of up to 70%.
Strengthening Workplace Safety
The Occupational Safety, Health and Working Conditions Labour Code merges 13 laws to create a safer work environment:
- Women can work night shifts with consent and safety measures in place.
- Employees receive annual health check-ups at no cost.
- Standard working hours remain 8 hours/day and 48 hours/week, with overtime requiring consent and double pay.
- The definition of migrant workers now includes direct, contract, and self-migrated employees.
- Large establishments (500+ employees) must form safety committees, and at least 50% of fines from violations go to victims or their families.
What This Means for India’s Workforce
Analysts say the codes represent a major step toward formalising India’s workforce, making it more inclusive and secure. Workers gain wider social security coverage, fairer pay, and protections for fixed-term and gig employment. At the same time, businesses benefit from simplified compliance, clear regulations, and reduced legal risks.
The government’s approach signals a shift toward modern, flexible, and worker-friendly policies that aim to boost productivity while ensuring fair treatment across industries.
