Effective from: 21 November 2025
A massive overhaul: 29 old labour laws merged into 4 simplified Labour Codes
India has officially entered a new era of labour reforms. The government has replaced old, scattered labour laws with four modern, centralised Labour Codes. This is the biggest change in labour regulation since Independence, affecting every worker — formal, informal, gig, platform, contract, factory, and corporate.
This newsletter breaks down ALL major changes, why they matter, and how the new system is different from the old one.
🔵 THE FOUR NEW LABOUR CODES
Code on Wages
Industrial Relations (IR) Code
Social Security Code
Occupational Safety, Health & Working Conditions (OSHWC) Code
Each replaces multiple earlier laws, removing duplication and making compliance easier.
1️⃣ CODE ON WAGES – What’s New and How It’s Different
What’s New Now
One universal minimum wage for every worker — including unorganised, gig, platform workers.
Introduction of a National Floor Wage: States cannot set wages below this minimum.
Redefined “Wages”: Basic + DA + retaining allowance must form at least 50% of total salary.
Overtime pay fixed at double the normal wage.
Stricter rules for timely salary payment.
Earlier (Old System)
Minimum wage laws varied widely across states and industries.
No national floor wage – states often set very low wages.
Employers split salaries into many allowances to reduce PF/ESI contributions.
Overtime rules were inconsistent and often unclear.
What This Means
Workers earn more predictable wages. Employers must restructure salary components honestly. Wage exploitation becomes harder.
2️⃣ INDUSTRIAL RELATIONS CODE – What’s New and How It’s Different
What’s New Now
Layoff & retrenchment rules eased for businesses:
Companies with up to 300 employees can now lay off without seeking government approval.Fixed-Term Employment recognized formally, giving such employees full benefits similar to permanent staff (like gratuity).
Modernised definitions of strikes, lockouts, and industrial disputes.
Employers must issue mandatory appointment letters to all employees.
Earlier (Old System)
Approval required if a company had more than 100 workers, causing delays and discouraging hiring.
Fixed-term workers didn’t get many benefits (such as gratuity).
Many industrial laws were old, complex, outdated.
Written appointment letters were often not mandatory, especially for contract or casual workers.
What This Means
Businesses get more flexibility. Workers get more transparency and formal contracts.
What’s New Now
Social security expanded to gig workers, platform workers, unorganized sector workers.
Creation of new Social Security Fund for these workers.
Wider coverage under ESI (Employee State Insurance).
Gratuity eligibility eased: Fixed-term employees get gratuity even after 1 year.
Earlier (Old System)
Gig workers (Ola, Uber, Zomato, Swiggy etc.) had zero social security.
Unorganised workers had fragmented schemes and poor coverage.
Gratuity only after 5 years for most employees.
Many were left out of PF, ESI, and pension systems.
What This Means
Millions of gig and informal workers finally get recognition and benefits for the first time ever.
4️⃣ OSHWC CODE – Health, Safety & Working Conditions (Big Changes)
What’s New Now
Working hours can range between 8 to 12 hours per day, but weekly limit remains 48 hours.
Women can work night shifts with safety measures and their consent.
Annual health check-ups for workers above a certain age (typically 40+).
Standardized safety rules across industries.
Earlier (Old System)
Strict 8–9 hour day limit; no flexible daily/weekly structuring.
Women were restricted from night shift work in many sectors.
Annual health check-ups were not mandatory.
Safety norms varied across industries and states.
What This Means
Flexibility increases, especially for modern industries like IT, manufacturing, e-commerce, and logistics. Safety standards become uniform.
🔵 OTHER IMPORTANT CHANGES EVERY WORKER MUST KNOW
Mandatory Appointment Letters
Every worker must receive an official written appointment — improving transparency.
Simplified Compliance for Employers
Instead of multiple registrations and filings, now many processes are merged into one license, one registration, one return.
Equal Pay for Equal Work
Strengthened anti-discrimination provisions for gender and other factors.
Higher Costs for Employers
Because "wages" must be at least 50% of total pay, PF and gratuity contributions are likely to rise.
📌 SUMMARY: WHAT WORKERS GAIN VS WHAT EMPLOYERS GAIN
Workers Gain
Better wages
Clear contracts
Social security for gig & informal workers
Night shift access for women
Free health check-ups
Standard safety protections
Timely salary payment
Higher PF and gratuity benefits
Employers Gain
Simplified compliance
Greater hiring flexibility
Easier layoff/retirement rules
Legal recognition of fixed-term jobs
Clearer definition of strikes/disputes
🎯 FINAL TAKEAWAY
India’s new labour codes aim to create a modern, flexible, fair labour market.
They bring formalisation, protect vulnerable workers, simplify compliance, and align India with global standards.