India has finally rolled
out its long-awaited four labour codes, bringing the biggest shake-up in work
and employment laws in decades. These new rules promise simpler compliance for
employers and stronger protection and benefits for workers across sectors.
What are the four labour codes?
The government has merged 29 separate labour laws into just four broad codes to make the system simpler and more consistent across the country. These four codes are meant to cover almost everything related to wages, working conditions, social security and industrial relations in one unified framework.
The four codes are:
- Code on Wages, 2019
- Industrial Relations Code, 2020
- Code on Social Security, 2020
- Occupational Safety, Health and Working Conditions (OSH) Code, 2020
When did the new codes come into effect?
All four labour codes have now been made effective from 21 November 2025 across India. This marks the formal shift from the old patchwork of central labour laws to a single, modern structure that applies to most workers and employers.
Many of the rules had been passed by Parliament earlier (between 2019 and 2020), but were waiting for notification and alignment with state rules, which has now happened. From this point, compliance, inspections, and worker rights will be tested under the new system rather than the earlier 29 individual Acts.
Why were the labour codes introduced?
India’s earlier labour laws were spread across several Acts written in different eras, often overlapping and sometimes confusing even for experts. The new codes aim to remove this complexity, reduce paperwork, and make it easier to understand what is required from both employers and employees.
The broader goals are to improve ease of doing business, encourage formal employment, and at the same time expand social security and basic protections to more workers, including those in the unorganised and gig economy. The government also wants to align Indian labour regulations with changing work patterns and global standards.
Code on Wages: what changes for pay?
The Code on Wages brings all wage-related rules like minimum wages and timely payment under one roof for all employees, regardless of sector or wage level. It introduces a national “floor wage” below which no state can set its minimum wage, helping reduce extreme wage differences across regions.
Key impacts include:
- Universal right to minimum wages for workers in both organised and unorganised sectors.
- Regular revision of minimum wages and strict timelines to ensure wages are paid on time.
- Equal pay for men and women doing the same work, reinforcing protections against gender-based pay gaps.
- Industrial Relations Code: rules for hiring, firing and unions
The Industrial Relations (IR) Code focuses on how companies manage hiring, layoffs, retrenchment, and closure, and how trade unions and collective bargaining function. It seeks to give businesses more flexibility while adding some safeguards for workers during disputes and restructuring.
Major aspects include:
- Fixed Term Employment (FTE), where contract workers hired for a fixed period must receive the same pay and benefits as permanent workers, with faster eligibility for gratuity.
- Updated rules for strikes, lockouts, and dispute resolution to encourage negotiation and faster settlement of conflicts.
- Threshold changes for when government approval is required for layoffs and closures in larger establishments, designed to provide flexibility but also subject to safeguards.
- Social Security Code: benefits beyond salary
The Code on Social Security aims to extend social protection like provident fund, insurance, and pensions to a much wider group of workers, including gig workers, platform workers, and those in the unorganised sector. It tries to plug long-standing gaps where many people worked full time but had no safety net in case of illness, old age, or job loss.
Key provisions include:
- Expansion of Employees’ State Insurance (ESI) benefits to cover more sectors and districts, with a push towards all districts having ESI facilities.
- Wider coverage of Employees’ Provident Fund (EPF) and pension-like benefits for more categories of workers.
- Creation of a Social Security Fund to support unorganised and gig workers, funded through contributions and government support.
- OSH Code: safety and working conditions
The Occupational Safety, Health and Working Conditions Code sets basic standards for safe, healthy and humane workplaces across factories, mines, plantations, construction, and many service sectors. It combines multiple earlier laws into one framework covering everything from working hours to safety gear.
Highlights include:
- Clear norms for working hours, overtime (including double wages for overtime in many situations), rest intervals, and annual health check-ups in specified establishments.
- Stronger safety requirements, including protective equipment, medical facilities, and emergency arrangements in hazardous industries.
- Special protections for women workers, including equal pay, consent-based night shifts with safety measures, extended maternity benefits, and crèche facilities where applicable.
Who gains the most from these changes?
The biggest gains are expected for workers who were earlier outside the formal net such as unorganised sector workers, gig workers, and those in small units who often had no written contracts or social security. With requirements like appointment letters, minimum wages, and extended social benefits, more workers should get traceable records and access to schemes.
Employers benefit from having fewer overlapping laws, clearer definitions, and digital compliance options, which can reduce legal risk and administrative costs. At the same time, the codes push companies towards more formal employment and better record-keeping, which may require changes in HR, payroll systems, and contracts.
What should workers and employers do now?
Workers should understand basics like their right to minimum wages, appointment letters, overtime, and available social security schemes under the new codes. Keeping personal records such as appointment letters, pay slips, and ID details will be more important than ever to claim benefits and resolve disputes.
Employers need to review contracts, HR policies, working hour structures, and compliance systems to ensure they match the new definitions and thresholds in each code. Both sides - workers and management will benefit from awareness sessions, simple guides, and consultation with experts to smoothly transition into the new labour regime.
Listing immediate compliance steps for employers to implement:
Employers should immediately review contracts, HR policies, and workplace practices against the four new labour codes, then fix any gaps through updated documents, systems, and staff training. Starting early reduces legal risks and avoids last‑minute scrambling during inspections or disputes.
1. Organisation‑level groundwork
- Map all current labour law registrations, licences, and returns to the new single registration, single licence, and single return framework under the codes.
- Set up an internal labour-code task force (HR, finance, legal, operations) to coordinate changes and track state‑specific rules.
- Conduct a quick compliance audit to spot gaps in wages, working hours, PF/ESI, safety, and contract labour practices.
2. Code on Wages – pay and documentation
- Rework salary structures to align with the new definition of “wages”, ensuring minimum wage and floor wage requirements are met for every category and location.
- Put systems in place to ensure timely wage payment for all employees and maintain wage, attendance, and overtime registers in the new prescribed formats.
- Standardise and issue appointment letters to every worker, including contract and casual workers, clearly mentioning wage components and working hours.
3. Industrial Relations Code – contracts and disputes
- Update employment contracts, standing orders, and HR policies to reflect fixed‑term employment rules, notice periods, misconduct, and disciplinary procedures under the new code.
- Establish or update grievance redressal committees and, where required, works committees to handle employee complaints and disputes.
- Review retrenchment, closure, and layoff processes, especially threshold-based approval requirements, and create SOPs before any restructuring moves.
4. Social Security Code – PF, ESI, and benefits
- Verify coverage and timely remittance of EPF, ESI, gratuity, maternity benefits, and other schemes for all eligible workers, including fixed‑term employees.
- Identify gig, platform, and unorganised workers linked to the business and prepare to contribute to the social security fund where applicable.
- Consolidate and digitise records of contributions, benefit eligibility, and employee identities to match new reporting and inspection norms.
5. OSH Code – safety and working conditions
- Check compliance with new norms on working hours, overtime (double wages where applicable), weekly offs, and night shifts, especially for women workers.
- Update safety policies, risk assessments, and emergency plans; ensure mandatory facilities like drinking water, toilets, canteens, restrooms, crèches, and medical rooms are in place where required.
- Form health and safety committees for eligible establishments and schedule periodic health check‑ups and safety trainings, recording all activities properly.
6. Training, communication, and monitoring
- Train HR, payroll, and line managers on the four codes and new procedures (wages, contracts, leave, discipline, safety, and benefits).
- Inform employees in simple language about key rights and changes such as - appointment letters, wage slips, PF/ESI details, overtime, and grievance channels.
- Set up ongoing internal audits and compliance dashboards so management can track adherence and respond quickly to any inspection or employee complaint.
Key Takeaway - Like any big reform, the real test will be in day‑to‑day implementation like how quickly states align rules, how fairly inspections work, and how aware people are of the changes. If these pieces fall into place, India’s new labour codes could turn what was once a confusing patchwork of regulations into a more transparent, predictable and worker‑friendly world of work.
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