Introduction: India's Most Significant Labour Law Reform since Independence

India's labour law landscape has undergone a landmark transformation. The Government of India consolidated 29 central labour laws — many of them dating to the pre-Independence era — into four comprehensive Labour Codes. These codes came into force on 21 November 2025, marking the beginning of a new compliance era for employers, HR professionals, businesses, and workers across the country.

The four Labour Codes are:

1. Code on Wages, 2019
2. Industrial Relations Code, 2020
3. Code on Social Security, 2020
4. Occupational Safety, Health and Working Conditions (OSH) Code, 2020

Together, they aim to simplify compliance, modernise outdated provisions, extend social security to gig and platform workers, and create safer and more equitable workplaces — while improving the ease of doing business in India.

1. Code on Wages, 2019: A Unified Framework for Fair Pay

The Code on Wages, 2019 merges four key wage-related laws — the Payment of Wages Act, the Minimum Wages Act, the Payment of Bonus Act, and the Equal Remuneration Act — into a single statute, creating uniformity in wage regulation across all industries and states.

Key Provisions at a Glance

1. National Floor Wage: The Central Government sets a minimum floor wage below which no state may fix wages, ensuring a basic standard of living for all workers.
2. Gender Pay Equality: Discrimination on the basis of gender in wages or recruitment for similar work is expressly prohibited.
3. Wage Definition Tightened: Any allowance exceeding 50% of total remuneration must be counted towards social security calculations, curbing the practice of artificially inflating allowances to reduce statutory contributions.
4. Timely Payment: Employers must pay wages by specified deadlines and settle full-and-final dues within two working days of employee separation (subject to timelines notified by the appropriate Government or prescribed under other applicable laws).
5. Overtime Pay: Mandatory double wages for work beyond normal working hours.
6. Bonus Eligibility: Extended to employees meeting minimum service and wage criteria, with eligibility after 30 days of work in a year.
7. Record-Keeping: Employers must maintain prescribed registers covering wages, muster rolls, fines, and related particulars, with any realisations applied solely for employee welfare.

2. Code on Social Security, 2020: Extending the Safety Net to Gig and Platform Workers

The Code on Social Security, 2020 consolidates nine existing social security laws — including the Employees' Provident Funds Act and the Employees' State Insurance Act — into one comprehensive framework. Its most significant innovation is the formal recognition of gig workers and platform workers within India's statutory labour law for the first time.

Key Provisions at a Glance

1. Gig and Platform Workers: Formally defined and brought within the social security framework. The government is empowered to design targeted schemes covering life insurance, disability insurance, and health benefits for these workers.
2. Fixed-Term Employees — Gratuity: Fixed-term employees become eligible for pro-rata gratuity after completing just one year of service (compared to the five-year continuous service requirement that continues to apply to permanent employees).
3. Maternity Benefits: Retained at up to 26 weeks of paid leave, with specific provisions for adoptive and commissioning mothers.
4. Construction Workers: A cess of 1% to 2% of construction cost may be levied to fund social security and welfare measures for building and construction workers.
5. ESIC and EPF: Existing thresholds for provident fund and employee state insurance coverage are retained, with digital portability of benefits introduced across states.

3. Industrial Relations Code, 2020: Streamlining Disputes and Modernising Industrial Relations

The Industrial Relations Code, 2020 consolidates three laws — the Trade Unions Act, the Industrial Employment (Standing Orders) Act, and the Industrial Disputes Act — into a single statute. It aims to promote harmonious employer–employee relations, provide effective dispute resolution mechanisms, and balance workers’ rights with ease of doing business.

Key Provisions at a Glance

1. Fixed-Term Employment: A new category of contractual employment for a defined period. Fixed-term workers are entitled to the same wages, working hours, and statutory benefits as permanent employees for similar work — including one-year gratuity eligibility.
2. Recognition of Negotiating Union / Negotiating Council: In industrial establishments with registered trade unions, the employer must recognise a Negotiating Union or constitute a Negotiating Council for collective negotiations. Where only one union exists, it is recognised as the sole negotiating union. Where multiple unions exist, the union with 51% worker support is recognised; if none has 51% support, a Negotiating Council comprising unions with at least 20% worker support must be constituted.
3. Works Committees: The appropriate Government may require constitution of Works Committees in establishments with 100 or more workers to promote employer–worker cooperation.
4. Grievance Redressal Committees: Mandatory in establishments with 20 or more workers, with equal representation and adequate participation of women.
5. Standing Orders: Threshold raised to 300 employees (from 100); employers must prepare and certify standing orders based on model standing orders, reducing ambiguity in service conditions.
6. Retrenchment/Closure Approval: The threshold for mandatory government approval before retrenchment, lay-off, or closure has been raised from 100 to 300 workers — states may raise this further.
7. Strikes and Lock-Outs: Mandatory notice periods prescribed; strikes and lock-outs prohibited during conciliation, arbitration, or tribunal proceedings.

4. Occupational Safety, Health and Working Conditions (OSH) Code, 2020: Safer Workplaces for All

The OSH Code, 2020 consolidates 13 existing central labour laws — including the Factories Act, 1948, the Contract Labour Act, 1970, and the Inter-State Migrant Workmen Act, 1979 — into a single, technology-enabled compliance framework. It introduces a single registration system.

Key Provisions at a Glance

1. Single Registration: One registration covers an establishment under all applicable provisions, drastically reducing administrative burden.
2. Women's Employment: Women may now work in all types of establishments, including night shifts, subject to their consent and mandatory safety measures — a significant expansion of employment opportunities.
3. Annual Health Check-ups: The employer shall provide free annual health examinations or tests to employees of such age groups or classes, or in such establishments, as may be prescribed by the Appropriate Government.
4. Mandatory Appointment Letters: All workers, including contract and migrant workers, must receive appointment letters, bringing transparency and accountability to employment relationships.
5. Inter-State Migrant Workers: Provisions apply to establishments employing ten or more inter-State migrant workers and require employers or contractors to ensure suitable working conditions, report serious accidents, extend social security and medical benefits, provide annual to-and-fro journey fare to the worker’s native place, and facilitate portability of welfare benefits as prescribed by the Government.
6. Contract Labour: Applies to establishments and contractors employing 50 or more contract labour. Contractors must obtain a valid licence and ensure timely payment of wages, while the principal employer is responsible for welfare facilities and liable for wages in case of contractor default. Contract labour in core activities is generally prohibited except in specified cases.
7. Factory Definition Revised: A factory now means premises with 20 or more workers (with electric power) or 40 or more workers (without electric power).

Conclusion: What India's New Labour Codes Mean for You

India's four Labour Codes represent the most comprehensive overhaul of employment regulation since Independence. Effective from 21 November 2025, they consolidate 29 laws into a coherent framework that is simultaneously more worker-friendly (universal minimum wages, gig worker protection, fixed-term gratuity) and more business-friendly (single registration, higher thresholds, reduced compliance filings).

For employers and HR professionals, the immediate priorities are:

1. Issue mandatory appointment letters to all workers — this triggers social security benefits and is now non-negotiable.
2. Review your wage structure — the 50% allowance cap directly impacts EPF, ESI, and gratuity contributions.
3. Audit inter-state migrant worker records for displacement allowances, health check-ups, and journey allowances.
4. Update standing orders and service conditions to align with the new model standing orders under the IR Code.
5. Review fixed-term employment contracts — one-year gratuity eligibility changes your cost modelling.

For gig workers and platform workers, the Social Security Code finally extends the statutory safety net — watch for government notifications on specific scheme designs.

Implementation success will ultimately depend on state-level rule notifications and enforcement — both of which are still evolving. But the foundation is now firmly in place.