India has entered a new era of labour reform with the implementation of four comprehensive Labour Codes, effective November 21, 2025. The move consolidates 29 existing central labour laws into a modern legal framework aimed at simplifying compliance, expanding worker protections, and aligning regulations with global standards.
The codes include the Code on Wages (2019), Industrial Relations Code (2020), Code on Social Security (2020), and Occupational Safety, Health and Working Conditions (OSHWC) Code (2020). They introduce mandatory appointment letters, universal social security coverage, and guaranteed timely payment of minimum wages for all workers, including those in gig and platform-based jobs. The reforms are expected to benefit millions of employees across formal and informal sectors, with particular emphasis on women and youth.
Prime Minister Narendra Modi described the implementation as a “historic decision” and highlighted its dual impact on workers and businesses. “These codes empower employees, ensure safe workplaces, and simplify compliance, promoting ease of doing business,” he said. The government added that the reforms will create a foundation for fair remuneration, social security, and career growth, especially for migrant and contract workers.
The revised definition of wages under the Codes also has implications for compensation structures. Allowances previously excluded from wages, such as transport and housing, will now be capped at 50% for benefit calculations. Employers are being advised to review current salary structures to ensure compliance while optimizing financial outlays.
Legal experts note that India’s previous labour laws, many drafted between the 1930s and 1950s, were fragmented and largely outdated, offering limited protection for workers in modern sectors. The new Labour Codes unify regulations, extend coverage to gig workers, MSME employees, and contract staff, and establish a future-ready workforce with resilient industries.
By simplifying regulatory requirements and broadening worker protections, the four Labour Codes are poised to transform India’s labour landscape, bridging gaps between traditional employment models and the demands of a digital, gig-driven economy.
