In a landmark move poised to reshape India's labor landscape, the government has officially implemented the four Labour Codes, effective today, November 21, 2025. This legislative overhaul consolidates 29 existing central labor laws into four comprehensive codes, marking the most significant reform in the sector since Independence.

The four codes now in effect are:

• The Code on Wages, 2019: This code aims to standardize wage structures across various industries, ensuring minimum wages and timely payment to employees. It replaces the Minimum Wages Act (1948), Payment of Wages Act (1936), Payment of Bonus Act (1965), and Equal Remuneration Act (1976). A uniform definition of "wages" is introduced, addressing a previous source of litigation. The code also prohibits gender-based discrimination in pay, including against transgender persons.
• The Industrial Relations Code, 2020: This code seeks to promote harmonious employer-employee relations and expedite dispute resolution. It replaces the Trade Unions Act, 1926, the Industrial Employment (Standing Orders) Act, 1946, and the Industrial Disputes Act, 1947. It raises the threshold for mandatory government approval for retrenchment and closure from 100 to 300 workers.
• The Code on Social Security, 2020: This code aims to extend social security benefits to all workers, including those in the unorganized sector, gig workers, and platform workers. It consolidates nine major social security laws, including the EPF Act, ESI Act, and Maternity Benefit Act. For the first time, gig and platform workers are formally recognized and entitled to social security benefits such as Provident Fund (PF), Employee State Insurance (ESI), and maternity benefits.
• The Occupational Safety, Health and Working Conditions Code, 2020: This code consolidates 13 acts, including the Factories Act, Mines Act, and Contract Labour Act, to establish unified health, safety, and welfare standards across workplaces. It applies to most workers, excluding those in managerial roles earning above a certain threshold. The code mandates annual health check-ups for specified sectors, clearer safety standards, and timely wage payment guarantees. It also allows women to work night shifts with consent and appropriate safety measures.

The government has stated that these codes are designed to simplify compliance for employers while simultaneously extending social security and workplace protections to a broader segment of the workforce. This includes gig workers, platform workers, contract staff, fixed-term employees, and those working in MSMEs, plantations, mines, textiles, IT, and audio-visual production.

Key changes introduced by the new labor codes include:

• Uniformity and Transparency: The codes bring uniformity in wage and bonus regulations across all industries. A standard 8-hour workday is established, with provisions for a 4-day work week.
• Enhanced Social Security: Social security coverage is extended to unorganized, gig, and platform workers. Fixed-term employees are now eligible for gratuity after one year of service.
• Simplified Compliance: A single registration and return system replaces multiple filings. The codes also introduce digital mechanisms to facilitate industry operations.
• Flexibility for Employers: The threshold for requiring government permission for layoffs, retrenchment, and closures has been raised from 100 to 300 workers. Fixed-term employment is legally recognized, allowing employers to hire for specific periods with obligations similar to permanent employment.
• Focus on Workplace Safety: The OSH Code emphasizes a healthy and safe working environment for all workers, mandating risk assessments, safety training, and adherence to industry-specific safety guidelines.

The implementation of these codes is expected to have a wide-ranging impact on both employers and employees. For employers, the simplified and consolidated laws aim to reduce administrative burdens and compliance costs, fostering a better environment for doing business. However, businesses, especially small and medium-sized enterprises, may face challenges in managing their cost structures and implementing new policies related to payroll and compliance.

For employees, the codes promise improved social security benefits, safer working conditions, and a transparent wage structure. The changes in salary structure, with a higher basic pay component, may lead to increased deductions like Provident Fund, potentially reducing immediate take-home pay. However, the long-term benefits of enhanced social security and workplace protections are expected to outweigh these initial financial adjustments.

The implementation of these Labour Codes marks a significant step towards modernizing India's labor laws and creating a more efficient, equitable, and worker-centric labor ecosystem.