India’s New Labour Codes (Nov 2025) — What Changed, Who Wins, What Workers & Employers Must Do

Sameer Verma
4 days ago
6 min read

On 21 November 2025 the Government of India notified and brought into force four consolidated Labour Codes that replace 29 older labour laws. The reforms—covering wages, industrial relations, social security, and occupational safety—are intended to simplify compliance, extend protections (including to gig workers), and update archaic rules for the modern workplace. This post explains the key changes code-by-code, who benefits, the main concerns from unions, and practical next steps for employers and workers. Press Information Bureau+1

What happened — headline changes in plain language

The government implemented four Labour Codes: the Code on Wages (2019), the Industrial Relations Code (2020), the Code on Social Security (2020), and the Occupational Safety, Health & Working Conditions (OSHWC) Code (2020) — together replacing 29 central labour laws. Ministry of Labour & Employment+1
Major new entitlements and rules include: mandatory appointment letters for all employees, national minimum wage framework and guaranteed payday by the 7th of each month, gratuity eligibility reduced (including for certain fixed-term employees), and the legal recognition & social security coverage for gig/platform workers. Reuters+1
The codes also revise industrial-relations rules (thresholds for layoffs/closures), unify safety and working-conditions standards, and streamline licensing and compliance. Reuters

Why the reform now? — government case

The Ministry of Labour and Employment frames this as a modernization and rationalization push — consolidating decades-old, fragmented labour laws into a simpler framework that promotes compliance, worker protection and ease of doing business. Officials argue the new codes help formalize millions of workers (especially in gig and platform work), raise wage floors, and bring uniformity across states. Press Information Bureau+1

The four Codes — what each does (key points)

1. Code on Wages (2019) — wages & payment rules

National minimum wages framework: A floor that reduces regional wage disparities and requires employers to pay not below the prescribed minimum.
Timely wage payment: Employers must pay wages by the 7th of each month (or timeline specified).
Equal pay & fixed-term workers: Fixed-term employees are to be paid on par with regular employees for the same role; gratuity provisions have been broadened in some categories. Reuters+1

2. Industrial Relations Code (2020) — unions, layoffs & dispute resolution

Higher thresholds for government approval for layoffs/closures — raising the bar for mandatory government permission (making large-scale approvals less frequent and giving employers more flexibility), intended to reduce red tape for scaling businesses.
Streamlined dispute resolution and updated rules for strikes and industrial action (with new settlement processes and institutional mechanisms). Reuters

3. Code on Social Security (2020) — pensions, benefits & gig workers

Gig and platform workers formally recognized: For the first time, the law creates a mechanism for social security and welfare funds for gig/platform workers. Funding mechanisms may include platform contributions and pooled welfare funds.
Wider coverage: Social-security benefits now apply to many more workers, expanding maternity, health, pension and gratuity-like supports. Notably, gratuity eligibility is being eased in some sections (examples in media reporting include reduced minimum service period in specific contexts). DD News+1

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

Uniform safety & health standards across sectors, including mandatory medical checks and stronger accident/injury reporting.
Working hours & overtime: Daily working hours limits have been clarified (codes allow for daily work hours with aggregate weekly caps and overtime rules — the reforms include flexible daily hours with overtime protections). Women’s night-work rules are updated: women are allowed equal access to night shifts provided employers meet prescribed safety and transport safeguards. Reuters+1

What workers gain — the practical benefits

Appointment letters for all employees: clearer written terms (roles, wages, benefits) for workers — helpful for grievance/redress. The New Indian Express
Minimum wage clarity and timely pay: employers must conform to wage floors and pay on a specified schedule. This reduces arbitrary pay delays and regional discrepancy. mint
Social security for gig & platform workers: a major step toward extending pensions, insurance and other welfare to previously informal workers. DD News
Earlier access to gratuity in some cases: media note changes (e.g., gratuity access for certain fixed-term employees after shorter service) — this increases immediate worker protection. mint
Equal opportunities & safety for women: the codes explicitly permit female workers in night shifts with mandated safety measures, while also enhancing maternity/leave benefits in parts of the new framework. Reuters

What employers / businesses need to do — compliance checklist

Issue appointment letters: update onboarding to include a compliant appointment letter for every employee.
Recalculate payroll: ensure wages meet the new minimum rules and payroll cycles produce payments by the legally-mandated date.
Review fixed-term contracts: check whether gratuity or other post-employment liabilities now apply earlier than before.
Register & contribute to social security funds: especially if engaging gig/platform workers or contractors — create systems for compliance reporting and contributions.
Safety & WFH policies: update occupational health and safety measures, conduct regular medical checks if required, and prepare transport/safety arrangements for night-shift workers (especially women).
HR & policy updates: revise employee handbooks, contracts, and grievance/industrial relations processes to align with updated dispute resolution and layoff rules. The Economic Times+1

Trade unions & critics — why there’s pushback

Many unions argue the codes tilt power toward employers: they warn the higher thresholds for layoffs, and procedural streamlining may weaken union bargaining or make collective action harder. Some unions have signalled protests and called the reforms “anti-worker”, demanding amendments or rollback. The government and some worker groups defend the laws as modernization and greater coverage for informal workers. Expect political and legal contests as the new framework rolls out. Firstpost+1

Quick FAQ (what readers ask first)

Q — Do gig workers get pensions immediately? A — The Code creates mechanisms for social security coverage for gig/platform workers, but implementation (rules, funding, registration) will be phased — platforms and regulators must operationalize the welfare funds. Watch the implementing notifications for details. DD News

Q — Are companies now free to fire workers easily? A — No. The codes set legal processes for layoffs and closures; they broaden employer flexibility in some areas (e.g., raising thresholds), but procedural safeguards, notice and compensation rules remain. Interpretations will depend on implementing rules. Reuters

Q — When do these rules apply? A — The central notification came into effect on 21 Nov 2025; however, many operational details require rules and state-level notifications. Employers should monitor Ministry of Labour notifications and state labour departments for implementing guidelines. Press Information Bureau

What to watch next — implementation & state role

State rules & notifications: labour is a concurrent subject in India — states may have implementation roles (inspections, enforcement). Expect state-level FAQs and variations in timelines for specific compliance actions.
Platform contributions & governance: the Social Security Code will need clear rules on how platform companies contribute to gig-worker welfare funds and how entitlements are disbursed.
Judicial & legislative responses: unions may challenge provisions in court or press for legislative amendments; stay tuned for legal interpretations that may affect application. Press Information Bureau+1

Practical takeaways — for business owners & HR teams

Audit your workforce: map employee types (permanent, fixed-term, gig, contractor) and identify new liabilities (gratuity, social security obligations).
Update onboarding: create a compliant appointment letter template covering wages, working hours, probation, benefits.
Payroll & benefits: align payroll cycles, compute any new gratuity liability, and plan contributions for social security.
Health & safety: run a safety compliance gap analysis and implement required medical checks and reporting.
Train managers: brief HR and line managers on dispute resolution paths, termination/layoff processes and worker rights under the new codes. The Economic Times+1

Sources & further reading (key references)

Press Information Bureau — Government Makes the Four Labour Codes effective to Simplify and Streamline Labour Laws. Press Information Bureau
Reuters — India enforces four new labour codes in major overhaul of worker rules. Reuters
Economic Times — Four Labour Codes come into force: Who benefits, what changes, and what workers must know. The Economic Times
LiveMint — India gets new labour codes: Minimum wage guarantee, gratuity after 1 year, social security for 40 crore workers — Full list. mint
DD News / PIB coverage — Gig workers recognised in law for the first time as new Labour Codes take effect. DD News