From 40+ Laws to 4: New Labour Codes Take Effect from 21st Nov 2025

Feature

Pre-Labour Reforms

Post-Labour Reforms (New Codes)

Formalisation

No mandatory appointment letters.

Mandatory appointment letters for all workers, ensuring transparency and job security.

Social Security

Limited social security coverage.

Universal social security for all workers, including gig and platform workers (PF, ESIC, insurance).

Minimum Wages

Applied only to scheduled industries, leaving many uncovered.

Statutory minimum wage payment guaranteed to all workers.

Women's Rights

Restrictions on night shifts and certain occupations.

Women permitted to work at night and in all types of work, with their consent and mandatory safety measures.

Healthcare

No legal requirement for health check-ups.

Employers must provide a free annual health check-up for workers above 40 years of age.

Compliance

Multiple registrations, licenses, and returns.

Single registration, PAN-India single license, and single return, significantly reducing the compliance burden for industry.

Area

Key Change/Benefit

Code Reference

Gratuity Eligibility

Eligibility for Gratuity is reduced from five years to just one year of continuous service for fixed-term employees.

Code on Social Security, 2020

Universal Minimum Wages

Statutory right to minimum wages for ALL workers (organized and unorganized sectors). A Central "Floor Wage" will prevent states from fixing wages below a national standard.

Code on Wages, 2019

Gig & Platform Workers

Legally recognized for the first time. Aggregator platforms (like Uber, Ola, Swiggy) must contribute 1-2% of annual turnover (capped at 5% of payouts) to a new Social Security Fund for these workers.

Code on Social Security, 2020

Annual Health Check-ups

Free annual health check-ups are mandated for workers above a certain age (often 40+) in many sectors, including hazardous industries.

OSHW Code, 2020

Women's Rights

Gender discrimination is legally prohibited. Women are now allowed to work night shifts and in all occupations (including underground mining) with their consent and mandatory safety measures.

OSHW Code, 2020

Formalization

Employers must issue a formal Appointment Letter to all workers, including contract and fixed-term employees, promoting job security and social security eligibility.

OSHW Code, 2020

Wage Payments

All workers are guaranteed timely payment of wages with stricter enforcement.

Code on Wages, 2019

Leave &Overtime

Overtime work must be compensated at least twice the normal rate (Double Wages).

Code on Wages, 2019

Area

Key Change/Benefit

Code Reference

Uniform Definition of Wages

A single, uniform definition of "Wages" is introduced. This impacts the calculation of Gratuity, PF, ESIC, and bonus, often by ensuring at least 50% of the total remuneration is considered as 'Wages.'

Code on Wages, 2019

Fixed-Term Employment (FTE)

Employers can hire Fixed-Term Employees for specific projects with all the statutory benefits (gratuity, leave, social security) of permanent workers, reducing over-reliance on contract labour.

IR Code, 2020

Compliance Simplification

Replaces multiple registrations, licenses, and returns under 29 laws with a Single Registration, Single License, and Single Return system for all four Codes, significantly reducing the compliance burden ("Ease of Doing Business").

All Codes

Inspector Role

The traditional "Inspector" role is replaced by an "Inspector-cum-Facilitator," who is mandated to provide guidance and advice for compliance rather than just penalizing.

All Codes

Retrenchment Threshold

The threshold for requiring government approval for layoffs, retrenchment, or closure has been raised for Industrial Establishments from 100 to 300 workers (though this provision remains a point of debate with unions).

IR Code, 2020