New Delhi: India’s labour laws have long been criticised for being disorganised, old-fashioned, and difficult. Many of the laws date back to the pre-Independence and early post-Independence era (1930s–1950s).
There were 29 different laws about social security, wages, industrial relations, and occupational safety, which created ambiguity and compliance issues for both companies and employees.
But now, a new era for workers and industry has started.
A revision and re-evaluation of these laws was overdue. The outdated and complex nature of labour laws has been frequently criticised by many firms, labour groups, and organisations, who claim they are detrimental to the industry and its employees. Therefore, there was a need to revisit them.
In this article, we will see what the four pillars of reform are, changes for workers, sector-specific changes and end with a conclusion.
A historic turning point
The Government of India has announced that four Labour Codes will be made effective from 21 November 2025, consolidating 29 existing labour laws. The goal of this decision is to update labour laws, enhance worker welfare, and adapt the labour ecosystem to the evolving nature of the workplace.
The move is seen as laying the foundation for a future-ready workforce and stronger industries, driving labour reforms for anAatmanirbhar Bharat (self-reliant India).
The four pillars of reform
The labour codes are built on four pillars, each addressing a critical dimension of employment:
- Code on Wages (2019): Prompt Payments and Universal Minimum Wages.
- Industrial Relations Code (2020): Simplified dispute resolution and flexible hiring.
- Code on Social Security (2020): ‘Gig’, platform, and informal workers are now included.
- Occupational Safety, Health and Working Conditions Code (2020): Stronger safety standards and preventive healthcare.
Together, they create a comprehensive labour architecture that benefits workers and industries/businesses.
Changes for workers in the new law code
- Appointment Letters: Every worker must receive a formal appointment letter (i.e. Letter of employment). Transparency, job security, and stable employment will all be guaranteed by written documentation.
- Universal Minimum Wages: Every employee is entitled to a statutory minimum wage payment under the 2019 Code on Wages. Financial stability will be ensured via minimum wages and prompt payment.
- Social Security Net: The Code on Social Security, 2020, ensures that all workers, including gig and platform workers, will receive social security coverage such as PF, ESIC, insurance, and other benefits.
- Healthcare: Employers are required to provide free annual health check-ups to all employees over 40 years of age, to promote a culture of preventive healthcare.
- Gender Equality: Women are allowed to work at night and in all types of jobs in any establishment as long as they take consent and safety measures are in place. This will provide women with equal opportunities to earn higher incomes in high-paying job roles.
- Timely Wage payments: Employers must provide timely wages to ensure financial stability, reduce work stress, and boost worker morale.
- Compliance Burden: The benefits of single registration, PAN-India single license, and single return in simplifying processes and reducing compliance burden.
Sector-specific highlights
There are some sector-specific New Labour Codes, which are as follows:
- Fixed-Term Employees:
The full-time employees (FTEs) will now receive the same benefits as permanent workers, including leave, medical, and social security. Additionally, FTEs will be eligible for gratuity after just one year instead of five, and will receive equal wages as permanent staff, providing increased income and protection. These changes aim to promote direct hiring and reduce excessive contractualisation.
- MSME Workers:
The Social Security Code, 2020, covers all MSME workers and guarantees a minimum wage for all employees. Workers will have access to facilities like canteens, drinking water, and rest areas. Provisions for standard working hours, double overtime wages, and paid leave are included, and timely wage payments are ensured.
- Plantation and Mine Workers: For both (Plantation and Mine Workers), protective equipment and safety measures are mandatory. Provision of protective gear is a must for both workers.
Workers and families will also get Employees’ State Insurance (ESI) medical facilities. Education facilities for their children are also guaranteed.
Annual Health Check-up is mandatory for mine workers. To maintain health and work-life balance, work hours are limited to 8 to 12 hours per day and 48 hours per week.
- IT & ITES Employees:
Salaries must be paid by the 7th of every month. All businesses should allow women to work nights so they can have the chance to make more money. Timely resolution of wage-related issues is recommended, while harassment and discrimination must be avoided. Social security benefits are guaranteed via mandatory appointment letters and fixed-term employment.
- Dock and Export Workers:
For both workers, there are mandatory formal appointment letters along with social security benefits.
Annual Health Check-ups are mandatory for Dock Workers. In order to guarantee good working conditions and safety, dock workers must have access to the required medical facilities, first aid, sanitary and washing spaces, among others.
After 180 days of work in a year, every employee should be able to take yearly leave for Export Sector Workers. Every worker should be entitled to timely wage payments, and no unauthorised wage deductions or wage ceilings are permitted.
Social Security Expansion
From 19 percent in 2015 to over 64 opercent in 2025, India’s social security coverage has increased significantly. The Labour Codes’ capacity to transfer benefits between states and industries guarantees that gig and migratory workers are no longer left out.
Conclusion
This reform is more than just a change to the law; it represents a restoration of the social contract. Through this intervention, India demonstrates its commitment to developing a secure, effective, and forward-thinking workforce by including equality, safety and welfare into its laws.
There may, however, be difficulties in implementing the codes across various businesses and states, and thus diligent monitoring will be necessary. However, the goal is evident: India has entered a new stage of labour governance.
The Labour Codes symbolize a historic coming together of worker protections and today’s industry.
The objective is a future that ensures the welfare of all Indian workers, including IT specialists, gig workers, miners, and women working at night.
This is more than just a reform. It is a call to transform.
