In a milestone moment for Indian labour policy, the Union government on November 21, 2025, brought into force four sweeping labour codes, on Wages, Industrial Relations, Social Security, and Occupational Safety and Health, replacing 29 existing laws that had governed Indian workplaces for decades.
Described as the most significant reset since Independence, the reform aims to streamline compliance, strengthen worker protections, and bring India’s labour ecosystem in line with global standards and a modern digital economy.
A Reform Timed for a Changing Economy
India’s labour market has expanded at an unprecedented pace in recent years. Between 2017–18 and 2023–24, the country added 16 crore jobs, unemployment fell from 6% to 3.2%, and 1.5 crore women entered the formal workforce. But this rapidly evolving labour landscape continued to be regulated by laws dating back nearly a century.
The new codes aim to fix that mismatch. By consolidating overlapping, complex and often contradictory laws, the government seeks to create a simpler, technology-driven regulatory structure that supports both growth and worker welfare.
Uniform Definition of Wages and Faster Gratuity
A central reform across all four codes is the uniform definition of wages, which brings clarity to salary structures and reduces loopholes created through allowances. This alone is expected to impact payroll calculations, PF contributions, gratuity, bonus entitlements, and overtime.
A landmark shift is the provision extending gratuity eligibility to fixed-term employees after just one year, instead of the earlier five-year requirement. This benefits India’s large project-based workforce in sectors like IT, manufacturing, media, and startups.
Industry experts, including Sudhakar Sethuraman of Deloitte India, call the change a long-awaited reset that introduces predictability and uniformity to compensation and compliance.
Gig and Platform Workers Formally Recognised
For the first time, India’s fast-growing gig workforce, which includes delivery executives, rideshare drivers, freelance service providers and digital platform workers, has been legally recognised. Under the Social Security Code, aggregators must contribute 1–2% of their annual turnover (capped at 5% of worker payouts) to newly established welfare funds.
Benefits envisioned include:
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Health insurance
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Disability and life cover
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Maternity protection
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Old-age benefits
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Accident compensation
A national database of unorganised workers will help ensure portability of entitlements across states. With the gig population estimated to reach 23.5 million by 2030, the move marks one of India’s most expansive welfare transitions.
Women Cleared for Night Shifts Across All Sectors
The new framework allows women to work night shifts across industries, including hazardous sectors, provided employers ensure safety, transportation and written consent. This change aligns Indian labour norms with global gender-parity standards and could open the door for women to access higher-paying shift-based roles in manufacturing, logistics, security services and mining.
Mandatory Health Check-Ups and Safety Rules
The Occupational Safety, Health and Working Conditions Code introduces uniform safety standards across sectors that earlier operated under fragmented rules. Key provisions include:
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Free annual health check-ups for all workers above 40.
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Expanded definition of migrant workers, covering self-migrating employees.
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Safety committees for establishments with 500+ employees.
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Recognition of certain commute-related accidents as employment-related.
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Formal coverage for digital and audio-visual professionals.
The government may extend safety provisions even to workplaces employing a single worker if the work is deemed hazardous.
Simpler Compliance: Single Registration, Unified Returns
One of the most significant reforms for employers is the shift from a complex compliance environment to a single registration, single licence and single return system. Inspections will move to a digital, risk-based model, reducing arbitrary checks and making processes more transparent.
Legal experts, including Atul Gupta of Trilegal, note that while the framework is modernised, the absence of a grace period means employers must reevaluate wage structures, working hours, leave policies and grievance mechanisms immediately. Where new rules are not yet notified, existing state rules will continue temporarily.
Structured Bargaining and Faster Dispute Resolution
The Industrial Relations Code consolidates laws governing trade unions, industrial disputes and employment conditions. Major provisions include:
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Negotiating union status for unions with 51% membership.
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Formation of a Negotiating Council where no union meets the 51% threshold.
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14-day mandatory notice for strikes in all establishments.
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Definition of strike expanded to include mass casual leave.
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Two-member industrial tribunals for quicker dispute resolution.
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A reskilling fund providing 15 days’ wages to retrenched workers.
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Formal legal framework for work-from-home arrangements in services.
A New Labour Landscape for 40 Crore Workers
The four labour codes collectively represent a shift from colonial-era legislation to a unified, digital-age system. The reforms:
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Bring millions of unorganised and gig workers into social security.
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Strengthen wage transparency.
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Offer women expanded employment choices.
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Ensure stronger safety protections.
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Reduce compliance burden for businesses.
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Promote faster dispute resolution.