New Four Labour Codes 2025 in India

New Four Labour Codes 2025 in India

New Four Labour Codes in India (Effective 21 November 2025)

The Government of India implemented the Four Labour Codes on 21 November 2025, replacing 29 existing Central labour laws with a unified, modern framework. This marks the largest labour reform since Independence, aimed at simplifying compliance, expanding social security, strengthening worker protection, and aligning India’s labour ecosystem with global standards and emerging work models such as gig and platform work.

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 (OSHWC) Code, 2020

1. Code on Wages, 2019

Key Provisions

• Universal statutory minimum wage for all employees across organised and unorganised sectors.

• Introduction of a national floor wage to ensure uniformity.

• Mandatory timely wage payments and prohibition of unauthorized deductions.

• Employers must issue appointment letters to all employees.

• Uniform definition of wages, ensuring fair PF and gratuity calculations.

• Overtime must be paid at double the wage rate.

• Ensures equal pay for equal work, including protections for transgender persons.

Impact

• Stronger wage protection for informal, unorganised, and contract workers.

• Greater transparency and reduced exploitation.

• Simplified compliance for businesses through unified wage rules.

2. Industrial Relations Code, 2020

Key Provisions

• Simplifies regulations around trade unions, employment terms, and dispute resolution.

• Layoff/retrenchment threshold increased from 100 to 300 workers for needing prior government approval.

• Fixed-term employment with parity in wages and benefits with permanent staff.

• Establishes two-member Industrial Tribunals for faster dispute resolution.

• Provides clearer rules for hiring and separation.

Impact

• More flexibility for businesses while preserving worker protections.

• Faster, simplified dispute handling.

• Encourages formalisation and structured employment contracts.

3. Code on Social Security, 2020

Key Provisions

• Expands PF, ESI, maternity benefits, insurance, and gratuity coverage.

• First-time legal recognition of gig and platform workers.

• Aggregators may contribute a percentage of turnover to social security funds.

• Gratuity for fixed-term employees after 1 year (earlier 5 years).

• Universal Aadhaar-linked social security number for portability across states.

• ESI coverage extended nationwide, including single-employee hazardous establishments.

• Maternity benefits up to 26 weeks; mandatory creches for establishments with 50+ workers.

Impact

• Social security coverage rose from 19% (2015) to 64% (2025), and this code aims to deepen coverage further.

• Major boost for unorganised, migrant, gig, platform, and women workers.

• Reduces administrative burdens through digitisation and portability.

4. OSHWC Code (Occupational Safety, Health & Working Conditions), 2020

Key Provisions

• Unified safety and health standards across all sectors.

• Working hours: 8–12 hours/day, capped at 48 hours/week.

• Mandatory free annual health checkup for workers aged 40+.

• Women may work night shifts across all sectors with consent and safety measures.

• Mandatory safety committees in establishments with 500+ workers.

• Covers migrant, contract, plantation, dock, and other vulnerable workers.

• Strengthens accident coverage, including accidents during commuting.

Impact

• Safer workplaces with uniform national standards.

• Greater inclusion of women in the workforce.

• Special protections for high-risk and migrant workers.

Major Systemic Reforms Introduced

Worker-Centric Reforms

• Mandatory appointment letters for all workers.

• Universal minimum wages and timely wage payments.

• Expanded health, maternity, and accident benefits.

• Gratuity after one year for fixed-term workers.

• Recognition and protection for gig/platform workers for the first time.

Business-Centric Reforms

• Single registration, single license, and single annual return for compliance.

• Digital records, online inspections, and reduced inspector discretion through the Inspector-cum-Facilitator model.

• Unified definitions and rules reduce ambiguity and legal disputes.

• Greater flexibility in hiring and restructuring for establishments with up to 300 workers.

Broader Goals of the Four Labour Codes

• Promote formalization of the workforce.

• Strengthen worker dignity and rights.

• Expand nationwide social security coverage.

• Enhance ease of doing business and industrial competitiveness.

• Align India’s labour system with global standards.

• Support a future-ready workforce under initiatives like Aatmanirbhar Bharat.

Criticism and Challenges

• Trade unions argue the codes make retrenchment easier and dilute collective bargaining rights.

• Concerns about longer working hours (up to 12 hours).

• Implementation depends on state-level rule notifications; some rules are still being finalized.

• Smaller firms may face short-term compliance challenges.