The year 2025 emerged as a landmark period for India’s labour landscape, with Government of India implementing four Labour Codes in November.
In a historic decision, the Ministry of Labour and Employment, has 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 and Working Conditions Code, 2020 with effect from 21st November 2025, rationalising 29 existing labour laws.
By modernising labour regulations, enhancing workers' welfare and aligning the labour ecosystem with the evolving world of work, Labour Codes implementation lays the foundation for a future-ready workforce and stronger, resilient industries driving labour reforms for Aatmanirbhar Bharat.
Major benefits of the four labour codes are given below:
Common Provisions:
Uniformity of Definitions: A key provision is the uniformity in definitions, ensuring uniformity across all codes.
Web-based Inspection system: Use of technology such as web-based Inspection has been introduced in order to ensure transparency and accountability in enforcement.
Inspectors are now Inspector-cum-Facilitators to support compliance and guide the employers and workers, eliminating “inspector raj.”
Provision of Compounding of offences is introduced.
The codes also provide for de-criminalization of offences, replacing criminal penalties (like imprisonment) with civil penalties (like monetary fines) for first time offences.
Simplified compliance: Single license, single registration, and single return system.
No gender-based discrimination, including against transgender persons, in recruitment, wages or work conditions.
Greater opportunities for women: Women allowed to work in all sectors, including night shifts (with consent and safety measures).
Women must have proportional representation in Grievance Redressal Committees.
1. The Code of Wages, 2019:
o Minimum wages become a statutory right for all employees in every sector, organised or unorganised.
o A Floor Wage is introduced, to be fixed by the Central Government; States cannot set minimum wages below the floor wage.
o Rules on timely payment and no unauthorised deductions now apply to all employees, regardless of wage ceiling.
o Employers must pay all employees overtime wages at least twice the wage rate for any work done beyond the working hours.
2. The Industrial Relations Code, 2020:
Fixed Term Employment (FTE) introduced; FTE workers get all benefits equal to permanent workers, helping reduce excessive contractualization.
A Re-skilling Fund is to be created; employers must contribute 15 days’ wages per retrenched worker for retraining, in addition to retrenchment compensation.
Formal recognition of trade unions ensured through the concepts of Negotiating Union and Negotiating Council for collective bargaining.
o Model Standing Orders in service sector now permit work-from-home based on mutual agreement.
o A Two-Member Industrial Tribunal (judicial + administrative) introduced for quicker dispute resolution.
o The Code allows electronic records, registration, and communication, improving transparency and reducing paperwork.
3. The Code on Social Security, 2020
ESIC coverage expanded nationwide; voluntary membership allowed for establishments with fewer than 10 employees; mandatory coverage for hazardous industries even with a single worker.
New definitions introduced: aggregator, gig worker, platform worker to cover emerging forms of employment.
Provision for a Social Security Fund to provide Social Security Schemes covering life & disability, health, old-age benefits, etc. for unorganised, gig, and platform workers.
A uniform definition of wages established (basic + DA + retaining allowance), to ensure higher social security benefits like gratuity, maternity benefit.
Commute-related accidents now treated as employment-related, making employees eligible for compensation.
Gratuity extended to Fixed Term Employees after one year of continuous service (instead of 5 years for regular employees).
4. The Occupational Safety, Health and Working Conditions Code 2020:
The code provides for universal application of occupational safety, health and welfare standards in all establishments having 10 or more workers and even for establishments with one employee, carrying out hazardous or life-threatening occupations.
Expanded definition of Inter-State Migrant Worker: Includes migrant workers employed by contractor, and also self-migrated workers; provides (a) annual lump-sum travel allowance, (b) portability of benefits and PDS to migrant workers and migrant construction-workers.
Free annual health check-up for employees.
Formalization through appointment letters: Every employee will be given appointment letters in the prescribed format.
Broader coverage of working journalists and cine workers: Now includes electronic media and all audio-visual production workers.
Single National OSH Advisory Board replaces multiple boards; this will set mandatory national standards for occupational safety and working conditions.
