In a landmark move to revamp India's labor laws, the government has consolidated 29 existing labor laws into four comprehensive codes, effective from November 21, 2025. This restructuring aims to modernize labor governance, enhance social security coverage, and simplify compliance procedures for industries. Prime Minister Narendra Modi hailed the implementation as "one of the most comprehensive labour-oriented reforms since Independence," emphasizing its potential to empower workers, streamline compliance, and boost ease of doing business.

Key Features of the Four New Labour Codes

The four codes are the Code on Wages, the Industrial Relations Code, the Social Security Code, and the Occupational Safety, Health and Working Conditions (OSH) Code.

• Code on Wages, 2019: This code consolidates four laws, including the Payment of Wages Act, the Minimum Wages Act, the Payment of Bonus Act, and the Equal Remuneration Act, seeking to strengthen workers' rights and promote wage uniformity. It introduces universal minimum wages, ensuring a statutory right for all employees in organized and unorganized sectors, a floor wage based on minimum living standards, and wage determination based on skills, geography, and job conditions. The code also prohibits gender discrimination in wages and employment conditions and mandates overtime compensation at twice the standard rate.
• Industrial Relations Code, 2020: This code aims to regulate trade unions, hiring and firing rules, dispute resolution mechanisms, and promote industrial peace. It expands the definition of "industry" and increases the threshold for layoffs requiring government approval from 100 to 300 workers. The code also permits work-from-home arrangements in the service sector by mutual consent and establishes two-member industrial tribunals for faster dispute resolution.
• Code on Social Security, 2020: The code seeks to consolidate laws related to social security benefits like Provident Fund (PF), Employees' State Insurance (ESI), maternity benefits, and gratuity. It extends social security coverage to gig workers and platform workers, requiring aggregators to contribute to a social security fund. The code also introduces a reduced one-year eligibility for gratuity for fixed-term employees. ESI benefits will be available pan-India and can apply to establishments with even a single employee engaged in hazardous work.
• Occupational Safety, Health & Working Conditions Code, 2020: This code focuses on worker safety, health, and working conditions, including provisions for workplace safety, health check-ups, working hours, and migrant labor. It allows women to work night shifts across sectors, including mines and hazardous industries, subject to safety measures and consent. The code also mandates free annual health check-ups for workers above 40 years and prescribes national safety standards across industries.

Impact on Workers

The new labor codes are expected to impact over 400 million workers in both the formal and informal sectors. Some of the key benefits for workers include:

• Expanded Social Security Coverage: The codes extend social security benefits to a wider range of workers, including those in previously uncovered sectors like gig and platform work.
• Improved Workplace Safety: The OSH Code emphasizes workplace safety standards and mandates regular health check-ups, contributing to a safer working environment.
• Gender Equality: The codes promote gender equality by prohibiting discrimination in wages and employment conditions and allowing women to work night shifts with adequate safety measures.
• Timely Wage Payment: The Code on Wages ensures timely payment of wages to all employees, preventing unauthorized deductions.
• Recognition of New Forms of Work: The codes formally recognize gig and platform workers, providing them with social security benefits and other protections.
• Gratuity Benefits: Fixed-term employees are now eligible for gratuity after one year of service, a significant reduction from the previous requirement.

Other Key Changes

Besides the above, the new labor codes bring about several other significant changes:

• Mandatory appointment letters for all employees.
• A national floor wage to ensure minimum earnings parity across states.
• Simplified compliance procedures for employers with a single registration, license, and return system.
• The introduction of inspector-cum-facilitators focused on guidance rather than punitive enforcement.
• Complete digitalization of labor-related processes.

These new labor codes represent a significant step towards creating a more modern, equitable, and efficient labor market in India. By consolidating and simplifying existing laws, expanding social security coverage, and promoting better working conditions, the codes have the potential to improve the lives of millions of workers and boost economic growth.