New workforce policies aim to prepare India for rapid economic expansion

India has introduced its most significant labour reforms since Independence. The government replaced 29 old and complex labour laws with four simplified and modern Labour Codes. These changes aim to protect workers, make compliance easier for businesses, and create a more formal and safe work environment. The reforms focus on workers’ rights, dignity, and safety, while supporting economic growth and business development.

The new Labour Codes are technology-driven and reduce paperwork. Earlier, labour laws included 1,436 provisions, 31 separate returns, 181 forms, and 84 registers. Companies needed eight registrations and four licences to comply. Now, there is one registration, one licence, and one electronic return. This simplification helps both employees and employers while strengthening worker protections.

Employment in India has grown rapidly in recent years. From 2017–18 to 2023–24, jobs increased from 47.5 crore to 64.33 crore, adding 16.83 crore new workers. Women entering the workforce also increased by 1.56 crore, supporting gender-inclusive growth. Social protection schemes have expanded and now cover millions, helping reduce poverty and encourage formal employment.

The Code on Wages ensures that all workers get at least the minimum wage. Previously, only about 30% of workers were covered. Now, a national floor wage guarantees that no state can pay below a central standard. Wage rules also consider skills, geography, and working conditions like temperature or humidity. All workers, including transgender employees, are protected from wage discrimination. Overtime is paid at twice the normal rate. Inspectors now guide and support businesses digitally, rather than only enforcing rules.

Worker protections and safety strengthened

The Industrial Relations Code modernises older laws and protects both permanent and fixed-term employees. Fixed-term workers now receive equal pay, benefits, and gratuity after one year. Employers also contribute to a Re-skilling Fund for retrenched workers. The threshold for government approval for layoffs or closures has increased from 100 to 300 workers, reducing delays while keeping compensation safeguards. The Code also expands coverage to journalists, supervisors, and other categories earning up to ₹18,000 per month.

ALSO READ: Dharmendra’s political journey reveals his surprising wish for absolute control

ALSO READ: When heart trouble hides: Why major artery blockages often show no symptoms

The Social Security Code brings sweeping reforms. ESIC benefits now cover all regions, and small establishments can opt in voluntarily. Employers engaged in hazardous work must provide coverage regardless of size. EPF disputes must be resolved within two years, and employers now deposit only 25% of the assessed amount when appealing. Gig and platform workers gain statutory recognition, with aggregators contributing to social security funds. Gratuity rules have been relaxed, allowing fixed-term employees to qualify after one year.

The Occupational Safety, Health and Working Conditions Code combines 13 old laws and sets uniform rules. It includes minimum thresholds for registration, covers inter-state migrant workers, and allows portability of benefits. Appointment letters are now mandatory, bringing informal workers into the formal system. Women can work night shifts with safety protocols, and the 8-hour workday and 48-hour workweek are strictly defined. Safety committees are required for large establishments, and a single national advisory board replaces six older boards. Contract labour rules are simplified, and licences for contractors now last five years.

Overall, the Labour Codes transform India’s workforce. They simplify complex rules, strengthen worker rights, and modernise outdated systems. Workers benefit from fair wages, safety, social security, and formal recognition. Businesses gain clarity, reduced paperwork, and the ability to plan growth effectively. Together, these reforms aim to create a modern, high-growth economy where workers’ rights and economic progress move hand in hand.

Prime Minister Narendra Modi’s vision of a worker-focused, inclusive, and prosperous India is embedded in these reforms. By simplifying compliance, expanding protections, and supporting formal employment, India is moving toward a future where every worker can earn safely, with dignity, and benefit from a growing economy. The Labour Codes mark a major milestone in building a fair and modern labour ecosystem, benefiting workers, businesses, and the nation.