India has taken a historic step toward modernising its labour system by putting four major labour codes into effect on November 21, 2025. These four codes—on wages, social security, industrial relations, and occupational safety and health—replace 29 old and outdated labour laws that had governed the country’s workforce for decades. The new framework aims to give workers better protection, expand social security, and make rules easier for employers to follow.
The earlier labour laws were created at different times and often overlapped or conflicted with each other. This made it difficult for both employers and workers to clearly understand their rights and responsibilities. With the introduction of these four labour codes, India now has a simpler, clearer, and more predictable system. The goal is to create a balance: workers should receive fair protections and benefits, while businesses should have an easier and more organised compliance process.
Experts say this major reform marks a turning point in India’s journey toward a modern workforce. It especially benefits millions of workers in the informal, gig, and digital sectors who previously did not have strong legal protections. At the same time, companies will find it easier to follow rules due to digital systems, single registrations, and reduced paperwork.
One of the most important changes under the new codes is the introduction of a unified definition of wages. Earlier, wages were defined differently across multiple laws, leading to confusion about salary calculations, allowances, bonuses, and benefits. Now, the same definition will be used everywhere. This helps create more transparency and ensures workers receive fair and consistent benefits.
Another major reform involves gratuity rules. Contract-based and fixed-term employees often faced uncertainty regarding long-term benefits because their jobs ended before they completed five years of service. Under the new codes, fixed-term employees can receive gratuity after only one year of service. This makes the system more fair and supportive for workers who take on shorter projects or temporary roles.
A groundbreaking step in the new framework is the formal recognition of gig and platform workers. These include delivery workers, cab drivers using app-based platforms, freelancers, and others who work independently without traditional employer-employee relationships. For the first time, such workers are covered under labour laws. Companies known as “aggregators”—like ride-hailing services and delivery platforms—must contribute to social security funds to support these workers. This will provide benefits like insurance, health coverage, disability support, and savings for the future.
The government will also create a national database to register unorganised workers, map their skills, and record their work history. This will help link them to jobs, training programmes, and welfare schemes.
The new codes also ensure greater gender equality. Women can now work night shifts in all sectors, including manufacturing, logistics, and even mining. Earlier, many of these jobs were only open to men due to safety concerns. Under the new law, companies must provide proper safety measures, transport, and written consent from the women who choose to work these shifts. This allows women to access higher-paying roles and wider opportunities.
On occupational safety and health, the codes introduce several strong protections. Workers aged above 40 will receive mandatory annual health check-ups, especially in sectors where the risk of exposure to harmful substances or heavy physical work is high. Large establishments must form safety committees that include representatives of workers and employers. The definition of migrant workers has been expanded to include those working in digital or remote arrangements, ensuring they receive necessary benefits. Some commuting accidents are now recognised as work-related injuries, giving workers better legal and financial support
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The framework also simplifies compliance for employers. Instead of multiple registrations and licences under different laws, companies now use a single registration and single licence. They also file a single return, reducing their paperwork. Inspections will be digital and risk-based, meaning they will be assigned objectively, reducing human interference and chances of harassment. This creates a transparent, predictable, and business-friendly environment while still protecting worker rights.
Industrial relations rules have also been updated. Disputes will now be handled by two-member tribunals to ensure faster decisions. Rules for recognising trade unions are clearer, reducing conflicts. Workers who lose jobs due to retrenchment will receive help through reskilling funds, enabling them to learn new skills and find fresh job opportunities. Work-from-home arrangements have also been officially recognised for the first time, reflecting the evolving modern work culture.
Experts say that although state governments must align their rules with the central codes, the overall direction of reform is positive. Once fully implemented, the new framework promises a more organised and supportive labour environment.
For millions of Indian workers—from gig workers delivering goods to factory labourers, IT professionals, contract employees, and migrants—these changes offer better security and a clearer future. The new labour codes are designed to build a work environment that is safe, predictable, fair, and modern. They bring India closer to a labour system that matches today’s fast-growing economy and diverse workforce needs.
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