Summary of Key Changes - India’s New Labour Codes

India has now brought into force a major overhaul of its labour law framework by implementing four new Labour Codes on November 21, 2025. With this reform, the Central Government has merged 29 separate labour laws into four streamlined codes: the Code on Wages, the Code on Social Security, the Occupational Safety, Health and Working Conditions Code, and the Industrial Relations Code. The intent behind this consolidation is to remove duplication, simplify compliance, and create a more transparent and uniform labour system across India.

The Code on Wages combines laws relating to minimum wages, payment of wages, bonus and equal remuneration. It expands key definitions by treating “employee” as a broader term that includes managerial and supervisory roles, with “worker” being a subset. It introduces a central floor wage and requires states to set minimum wages above this benchmark. Wages will now be calculated with a standard principle that considers 50% of monthly remuneration as “wages”, which may increase employer costs. The Code also brings tighter timelines for wage payments on separation, makes principal employers responsible for timely wage disbursal to contract labour, and extends the limitation period for wage-related claims to three years.

The Code on Social Security brings together nine earlier laws, including provident fund, insurance, gratuity, maternity benefits and welfare schemes. The definition of “employee” is broadened to cover most categories of workers, including contract labour and fixed-term employees. A notable inclusion is gig and platform workers, for whom the Code creates registration requirements, social security funds and aggregator contributions ranging from 1–2% of annual turnover (subject to caps). The new wage definition may reduce take-home salary but increase employer contributions. Gratuity eligibility remains five years for regular workers but is reduced to three years for journalists, and fixed-term employees become eligible on a pro-rata basis.

The Occupational Safety, Health and Working Conditions Code revamps workplace safety and welfare laws by combining thirteen previous statutes. Establishments with ten or more workers must now be registered, and employers cannot hire workers unless the establishment is duly registered. The definition of “worker” is widened and the applicability thresholds for factories are revised, potentially exempting small manufacturing units. Contract labour rules also undergo significant changes, thresholds increase from 20 to 50 workers, and principal employers become solely responsible for providing welfare facilities, even when labour is supplied by contractors. Contractors must issue appointment letters and experience certificates, and certain restrictions apply to deploying contract labour in core activities.

The Industrial Relations Code replaces three laws relating to trade unions, standing orders and industrial disputes. It redefines “industry”, enlarges the scope of “worker” by raising the supervisory wage ceiling to INR 18,000, and expands the role of the Grievance Redressal Committee. Standing Orders now apply to establishments with 300 or more workers, offering relief to smaller units. The definition of “strike” is widened to include mass casual leave, and a 60-day notice requirement applies to all strikes and lock-outs. The Code also formalises the concept of a “Sole Negotiating Body” by recognizing a trade union with majority membership or requiring a negotiating council when multiple unions exist. Employers must contribute to a Worker Re-skilling Fund when retrenching employees, and investigations into worker misconduct must be completed within ninety days.

By bringing several labour laws under one structure and using clearer, uniform definitions, the new Codes are designed to make compliance easier and more consistent for employers. At the same time, they aim to improve employee protections by setting out clearer rules on wages, social security, safety and workplace conditions. As companies begin preparing for the shift, the new framework is expected to cut down on administrative burdens, streamline day-to-day processes and create a more business-friendly environment that supports India’s wider economic goals.