New Labour Codes in India: 2025 Key Highlights & Rules

A simple guide to how India’s new labour codes change wages, gratuity, work-from-home, overtime, and social security for workers and employers.

India has just seen one of its biggest workplace changes in decades. The central government has brought new labour codes in India into effect, merging 29 older labour laws into four clear codes. These codes aim to make rules simpler for businesses while giving workers stronger rights on wages, safety, and benefits.

If you work in an office, a factory, a shop, or even as a gig or platform worker, these changes touch you. They affect your minimum wage, your gratuity, your overtime pay, and even your chance to work from home.

In this article, we break down the labour codes India 2025 in very simple language. You will see what changed in each code, how it affects employees and employers, and what steps you should take next.

What Are the New Labour Codes in India?

The government has combined 29 older labour laws into four large codes:

• Code on Wages, 2019
• Industrial Relations Code, 2020
• Social Security Code, 2020
• Occupational Safety, Health and Working Conditions (OSH) Code, 2020

These new labour law changes in India became effective in November 2025. The goal is to:

• Give workers a minimum wage guarantee
• Offer social security to more than 400 million workers
• Make it easier for businesses to follow one set of rules instead of many

The codes cover:

• Permanent and contract staff
• Fixed term employment
• Unorganised workers
• Gig and platform workers
• Inter-state migrant workers

So, almost every worker feels some impact.

Code on Wages 2019: Minimum Wage and Overtime Rules

The Code on Wages 2019 brings four older wage laws under one roof. It focuses on fair and timely pay for all workers.

Universal minimum wage and floor wage

Earlier, the minimum wage law in India covered only certain “scheduled” jobs. Many workers had no legal minimum wage.

Now:

• Every employee, in organised or unorganised sectors, has a legal right to minimum wages.
• The Centre will set a floor wage based on living costs.
• States cannot set their minimum wage below this floor, but they can set a higher amount.

This shift helps low-paid workers, especially in small shops, farms, and informal jobs.

New definition of “wages” and equal pay

The Code gives a clearer wage definition. In simple words:

• Wages include basic pay, dearness allowance, and retaining allowance.
• If allowances cross a limit, part of them gets added back into “wages” for calculations.

This matters because many benefits are linked to wages, such as:

• Gratuity
• PF contributions
• Bonus
• Overtime pay

The Code also pushes equal pay for equal work. Employers cannot discriminate in pay or hiring based on gender, including transgender identity.

Overtime pay and timely salaries

Under the new overtime pay rules in India:

• Normal working hours stay at 8 hours per day and 48 hours per week.
• Overtime must be paid at twice the normal wage rate.

The Code also stresses:

• Timely payment of wages
• Limited, clearly allowed deductions
• Employer responsibility for paying due wages

For many workers who stayed late without fair pay, these rules offer protection.

Industrial Relations Code 2020: Jobs, Gratuity and Work From Home

The Industrial Relations Code 2020 deals with trade unions, disputes, job terms, and layoffs. It also includes key features on fixed term employment gratuity and work from home rules in India for services.

Fixed term jobs and early gratuity

The IR Code allows companies to use fixed term employment more freely. But it also gives strong rights:

• Fixed term staff must get the same pay and benefits as similar permanent staff.
• Under new gratuity rules under the new labour codes, fixed term employees can get gratuity after one year of continuous service, not five years as before.

This is a big gain for project-based workers or staff hired for seasonal work.

Layoffs, strikes and unions

Some key changes in industrial relations:

• Larger factories and certain units now need government approval for layoffs and closure only if they have 300 or more workers, up from 100 earlier.
• A union with 51% membership becomes the single negotiating union.
• If no union has 51%, a negotiating council is formed.
• Workers must give 14 days’ notice before a strike. Mass casual leave can also count as a strike in many cases.

These rules aim to cut sudden disruptions while keeping space for worker voice.

Work from home in service sectors

The IR Code formally recognises work from home for the service sector, by mutual agreement:

• Remote work is allowed, but not an automatic right.
• Terms can be written into company policy and contracts.
• It supports hybrid setups in IT, BPO, consulting, and other service roles.

So, the new labour law in India gives a legal base for work from home rules, but the final decision still rests with the employer and job role.

Social Security Code 2020: PF, ESIC and Gig Worker Benefits

The Social Security Code 2020 merges nine old social security laws. It widens coverage for PF, ESIC, and adds gig workers social security for the first time.

EPF, ESIC and PF rules under the new code

The Code aims to expand EPF and ESIC coverage:

• ESIC can now apply across India, not just in selected “notified” areas.
• There is a time limit for starting EPF inquiries, which must usually finish within a set period.
• Appeal deposits for EPF disputes are lower, making it easier for employers to challenge orders.

For workers, this means stronger access to:

• Medical care through ESIC
• Retirement savings through PF
• Clearer, quicker handling of disputes

Gig and platform workers in social security

For the first time, the Code defines gig workers and platform workers in law:

• Aggregator companies (like app-based delivery or ride platforms) must pay a small share of their turnover into a Social Security Fund.
• This fund will support schemes for unorganised, gig, and platform workers, such as life, disability, health, and old-age benefits.

These steps do not make gig workers full employees. But they give a start to social security for gig workers, who earlier had almost no safety net.

Who counts as a dependant and what is an “accident”?

The Social Security Code also:

• Widens who counts as a dependant, including maternal grandparents and, for women, dependent parents-in-law.
• Treats certain accidents while travelling between home and workplace as work-related for compensation, if conditions are met.

These changes make it easier for families to claim help when something goes wrong.

OSH Code 2020: Safety, Working Hours and Women at Work

The Occupational Safety, Health and Working Conditions Code 2020 (often shortened to the OSH Code) merges 13 older laws about safety and working conditions.

Working hours, overtime and health check-ups

Under the OSH Code:

• Normal working time is still 8 hours a day and 48 hours a week.
• States can allow 8–12 hour shifts, as long as weekly limits are respected.
• Overtime must be voluntary and paid at double the wage rate.

The Code also promises:

• Free annual health check-ups for workers, usually above a set age.
• Standard safety and health rules for many types of workplaces.

Women’s work, night shifts and safety

The new rules support more equal work opportunities for women:

• Women can work in all types of establishments, including sectors that once had restrictions.
• Women can work night shifts, if they consent and if safety and transport measures are in place.

This is important for IT, manufacturing, logistics, and retail roles that often run 24×7.

Migrant workers and appointment letters

Across the OSH and Social Security Codes:

• The definition of inter-state migrant worker now includes workers who move on their own, not just through contractors.
• A national database of unorganised workers is planned to help with jobs and benefits.
• An appointment letter is mandatory for workers, with basic job and wage details clearly written.

This appointment letter mandatory rule helps workers prove service, claim benefits, and avoid disputes later.

Old vs New Rules: Quick Comparison

Here is a simple table showing how some major areas change under the new labour codes in India:

What Employees Should Do Now

If you are an employee, here are simple steps to take under the new labour law in India:

1. Check your salary slip
   • See how basic pay and allowances are split.
   • Understand how this affects PF and gratuity.
2. Ask for your appointment letter
   • Ensure your role, wages, and benefits are written down.
   • Keep a copy in a safe place.
3. Track your working hours
   • Note daily and weekly hours.
   • If you work extra, check if overtime is paid correctly.
4. Understand your gratuity rights
   • If you are on a fixed term contract, mark when you complete one year.
   • Speak to HR about gratuity under the new rules.
5. Use social security where available
   • See if you are covered by PF and ESIC.
   • If you are a gig worker, watch for new schemes linked to your platform.
6. For women workers
   • Ask about safety, transport, and timings for any proposed night shift.

What Employers and HR Teams Should Do

For employers, the new labour codes in India bring both relief and responsibility.

Key actions:

1. Review contracts and HR policies
   • Update them to match the Code on Wages 2019, Industrial Relations Code 2020, Social Security Code 2020, and OSH Code 2020.
   • Include clauses on overtime, WFH, and fixed term employment.
2. Rework salary structures
   • Align pay with the new wage definition and floor wage.
   • Check impact on PF rules under the new code and gratuity costs.
3. Strengthen compliance systems
   • Use single registration and single return options where allowed.
   • Keep digital records of attendance, overtime, and contributions.
4. Update workplace safety and health measures
   • Plan health check-ups and safety committees if thresholds are met.
   • Review policies for women’s night work and transport.
5. Engage with workers and unions
   • Explain changes clearly to staff.
   • Use negotiating unions or councils for structured dialogue.

Helpful internal anchor ideas for future blog posts:

• “salary structure under Code on Wages 2019”
• “checklist for labour codes India 2025 compliance”
• “PF and ESIC guide for Indian startups”

Common Myths About the New Labour Codes

Myth 1: These laws only affect big factories.
Reality: The codes touch almost every worker, including shop staff, office workers, and gig workers. Many rules apply even to small units.

Myth 2: Everyone now has a right to work from home.
Reality: Work from home is allowed in services by mutual consent. It is not a blanket right for all jobs or sectors.

Myth 3: Employers can fire workers whenever they want.
Reality: The layoff approval threshold has moved from 100 to 300 workers in some cases. But rules on notice, pay, and process still exist.

Myth 4: Gig workers now get the same benefits as permanent staff.
Reality: Gig and platform workers gain social security schemes funded by aggregators, but they still do not have full employee rights.

Myth 5: Everything changes overnight without clarity.
Reality: The main framework is now active, but detailed schemes and state rules will keep evolving. It is a rolling shift, not a one-day event.

Key Takeaways

• The new labour codes in India merge 29 older laws into four modern codes on wages, industrial relations, social security, and safety.
• Workers gain a minimum wage guarantee, earlier gratuity for fixed term jobs, wider social security, and improved working conditions.
• Employers get simpler compliance but must revise contracts, salary structures, and HR policies to match the new framework.
• Gig and platform workers receive formal recognition and social security schemes, while women see better chances for equal pay and safe night work.
• Real impact will grow over time as schemes, state rules, and court decisions shape how these codes work on the ground.

Did You Know?

Earlier, India’s minimum wage law covered only a part of the workforce. With the Code on Wages 2019, minimum wages for all employees becomes a legal right, supported by a national floor wage to reduce huge pay gaps between states.

Conclusion

The 2025 labour codes India 2025 reform is not just about new laws on paper. It is about how India wants its workplaces to look in the next decade. By merging many old laws into four cleaner codes, the government aims to give workers more dignity and security while giving businesses clearer, simpler rules.

For employees, this means learning about your new rights on wages, gratuity, overtime, social security, and work from home. For employers, this is the right time to clean up contracts, HR policies, and compliance practices.

If you understand the new labour codes in India and act early, you can protect yourself, plan better, and build stronger workplaces for the future.

FAQs

What are the four new labour codes in India?

India has grouped 29 old labour laws into four codes: the Code on Wages 2019, the Industrial Relations Code 2020, the Social Security Code 2020, and the Occupational Safety, Health and Working Conditions Code 2020. Together they cover pay, job terms, social security, and workplace safety.

When did the new labour codes come into effect?

The central government implemented the new labour codes in November 2025. From this point, the four codes and their rules began to replace many earlier central labour laws, with states issuing their own supporting rules and notifications.

How have gratuity rules changed under the new labour codes?

Under the new framework, fixed term employees can qualify for gratuity after completing one year of continuous service instead of five. The idea is to treat fixed term staff on par with regular staff for pay and benefits when they do the same work.

What are the new working hour and overtime rules?

Normal working time remains 8 hours a day and 48 hours a week. However, shifts can run up to 12 hours if weekly limits are met and rest breaks are given. Any work beyond normal hours must be voluntary and is paid at double the regular wage rate.

Do the new labour codes give me a right to work from home?

The codes do not create an automatic right to work from home. Instead, they legally recognise work from home in service sectors when both employer and employee agree. Companies can choose to offer remote or hybrid roles, but they are not forced to do so for every job.