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What are the New Labour Codes in 2025?

Understand the new labour codes 2025, major labour law changes 2025, key benefits, and their impact on workers and businesses

Written by : Knowledge Centre Team

2026-02-09

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8 minutes read

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India’s workforce is on the cusp of a major transformation as the new labour codes, 2025, usher in wide-ranging labour law changes. By consolidating multiple legacy labour laws into a streamlined framework, these reforms aim to modernise employment practices, improve compliance clarity, and extend protections to a broader segment of workers. At the same time, they seek to create a more flexible and efficient operating environment for businesses, striking a careful balance between worker welfare and economic growth.

Key Takeaways

  • New Labour Codes 2025 consolidate 29 laws into Wages, Social Security, Industrial Relations, and OSHWC for simpler compliance

  • e-Shram registration brings social security and benefits to platform workers for the first time

  • Provisions for minimum wages based on skill and region, and a general requirement for the timely payment of wages within a specific timeframe

  • Mandatory health checks, creches, night shift safeguards, and migrant protections enhance safety and comfort at workplaces

  • Streamlined disputes, flexible hiring, and digital compliance cut costs and boost investments

What are the New Labour Codes 2025?

The new labour codes 2025 consolidate 29 outdated central labour laws into four comprehensive codes, passed by Parliament between 2019 and 2020 and notified for implementation starting November 21, 2025, as per official government announcements. This overhaul, drawn from Ministry of Labour sources, simplifies compliance while expanding protections.

  • ​Code on Wages, 2019: Merges wage-related laws for uniform minimum wages and timely payments

  • ​Code on Social Security, 2020: Integrates 9 laws to broaden social security for all workers, including gig workers

  • ​Industrial Relations Code, 2020: Reforms dispute resolution, trade unions, and layoffs for smoother industrial harmony

  • ​Occupational Safety, Health and Working Conditions (OSHWC) Code, 2020: Updates safety standards and working hours across sectors

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​Key Objectives Behind Labour Law Changes 2025

These labour law changes 2025 aim to create a future-ready framework for India's growing economy. Drawing from official intents, they address long-standing complexities in the labour sector.

  • Simplify compliance by eliminating redundant laws and standardising definitions of wages and workers

  • ​Enhance worker protections by expanding social security and safety standards

  • ​Promote ease of doing business to attract investments and formalise jobs, including for gig and platform workers

  • ​Align India with global standards for occupational health and industrial relations

​Labour Law Changes 2025 in India

The new labour codes 2025 introduce targeted reforms across four pillars, reshaping daily workplace dynamics for millions. Each code streamlines specific areas while introducing progressive updates.

  • Code on Wages: Major Changes and Benefits: This code unifies wage laws to ensure fair pay structures nationwide. It mandates minimum wages by region and skill, redefines wages to include most allowances (excluding HRA, travel), and caps deductions.
    1. Fixed-term employees are eligible for proportionate gratuity after 1 year (previously 5 years), ensuring parity with permanents
    2. ​The government sets a binding floor wage based on the minimum living standard nationwide; states cannot go below, with regional/skill adjustments
    3. Double wages are mandatory for work beyond regular hours, now applicable universally (no wage ceiling)
  • Code on Social Security: Broader Coverage and Support: Expanding beyond traditional employees, this code covers gig and platform workers for the first time. It creates funds for their welfare and enhances benefits, including maternity leave of up to 26 weeks.
    1. ​ESIC and EPF benefits are now portable across jobs, allowing seamless continuity for workers who switch employers
    2. Defined social security measures extend comprehensive protections to unorganised sector workers, bridging longstanding gaps
    3. Gig workers can register on the e-Shram portal to access dedicated benefits and welfare schemes
  • Industrial Relations Code: Simplifying Workforce Rules: This code streamlines hiring and firing practices for firms with over 300 employees, requiring government approval for layoffs exceeding thresholds. It promotes parity between fixed-term and permanent employees.
    1. Tribunals enable faster dispute resolution, streamlining conflict management and reducing prolonged legal battles for workers and employers
    2. Dedicated re-skilling funds support workers during retrenchment, facilitating smooth transitions to new opportunities through training   
    3. Enhanced trade union recognition rules strengthen worker representation, ensuring fairer negotiations and collective bargaining processes
  • OSHWC Code: Workplace Safety, Health & Conditions Upgraded: Modernising 13 laws, it mandates safety committees for larger firms and regulates hours (maximum 8/day, 48/week), with overtime provisions. Creche facilities are now standard for establishments with 50+ employees.
    1. Certain sectors now mandate annual health check-ups, prioritising proactive employee well-being and early detection of health issues
    2. Women employees gain the flexibility to work night shifts with adequate safeguards, promoting gender-inclusive workplaces
    3. Inter-state migrant workers receive enhanced protections, including travel allowances and equal wage entitlements for fair treatment
trivia-img

Did You Know?

The gratuity cap remains ₹20 lakhs, as notified by the government, though the definition of "wages" has broadened, potentially increasing calculated amounts


Source: ET

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System-Wide Benefits of the New Labour Codes 2025

These reforms deliver holistic gains, fostering a resilient labour ecosystem. Key advantages emerge for economy-wide progress.

  • Formalisation of Workforce: By mandating appointment letters and social security for gig workers, the codes push informal jobs toward formality, improving data accuracy and access to credit for workers. This shift helps millions access loans and formal benefits. Workers gain visibility into economic data, enabling better policymaking.
  • Investment-Friendly Environment: Streamlined rules reduce compliance burdens, making India more attractive to labour-intensive industries such as manufacturing and textiles. Global firms can now scale operations faster, while job creation surges as businesses invest confidently.
  • ​Enhanced Dispute Resolution: Unified tribunals now slash dispute resolution times from years to mere months, minimising productivity losses across industries. Workplaces swiftly return to normal after conflicts, keeping operations on track. Both employers and workers save significantly on time and legal costs.

​Impact on Employers and Businesses

Businesses face adaptation needs but gain operational clarity from the 2025 labour law changes. Impacts vary by scale and sector.

  • Compliance Cost Reduction: Fewer laws translate to significantly less paperwork, while digital portals for returns streamline audits, especially for SMEs. This reduces administrative overhead, freeing resources for core business growth. Small enterprises, often burdened by complex filings, now face simpler, tech-driven compliance.
  • Flexible Workforce Management: Easier hiring of fixed-term staff and streamlined layoff approvals for larger firms enhance scalability during demand fluctuations. Businesses can adjust headcount dynamically without excessive red tape. This flexibility supports seasonal industries and startups navigating volatile markets effectively.
  • Higher Safety Investments: Stricter OSH standards demand upfront upgrades but yield lower accident-related liabilities over the long term. Investments in safety gear and training prevent costly downtime from injuries. Healthier workplaces boost morale and productivity, creating a win-win for operations.

How Workers Benefit From These Reforms?

These new labour codes, 2025, provide workers with tangible protections. A bridging shift ensures salaried, gig, and migrant employees thrive.

  • Minimum Wage Protections: Minimum wages now establish a solid earnings floor for all workers, while timely payment mandates curb chronic delays and ensure financial stability. This empowers low-income employees to plan their budgets with confidence, as employers must comply with clear wage structures, fostering trust.
  • Social Security Portability: Social security benefits such as ESIC and EPF are fully portable across jobs, providing uninterrupted coverage for frequent job-hoppers. Fixed-term and short-term roles qualify for gratuity from day one, securing retirement savings regardless of employment tenure.
  • Safer Workplaces and Gig Inclusion: Safer workplaces emerge through mandatory health check-ups, creches, and upgraded conditions, prioritising employee well-being. Gig and platform workers gain formal inclusion through e-Shram registration, extending protections to millions in the informal sector.
  • Equal Pay and Re-Skilling Support: Equal pay mandates ensure fairness for similar work, while re-skilling funds provide training during retrenchment. This builds long-term financial security and career mobility, enabling workers to transition smoothly into new roles and reducing the risk of unemployment.

​How to Access the Official New Labour Codes 2025 PDF?

Stay informed by downloading authentic documents directly from government portals. Follow these simple steps for quick access.

  1. Visit labour.gov.in and navigate to the "Labour Codes" section

  2. ​Click on the relevant code PDF links, such as labour_code_eng.pdf

  3. Save or print for reference; cross-check with PIB releases for updates

​Conclusion

The new labour codes 2025 mark a pivotal shift in labour law, streamlining complexity for over 50 crore workers. By prioritising fair wages, social security, safety, and flexibility, they balance employee rights with business growth, formalising the gig economy and aligning with 'Viksit Bharat'. Businesses preparing now through wage audits and training will operate in compliance, while workers gain unprecedented protections. Download official PDFs today to navigate this empowered era seamlessly.

Glossary

  1. Code on Wages: A labour law that standardises wage definitions and ensures timely payment and minimum wages across sectors
  2. e-Shram Portal: A government portal creating a national database of unorganised workers to enable access to social security schemes
  3. Fixed-Term Employee: A worker hired for a specific period with wages and benefits similar to permanent employees
  4. OSHWC Code: A labour code governing occupational safety, health, and working conditions across establishments
  5. Re-skilling Fund: A fund set up to support worker training and skill upgrades to improve employability in evolving job markets
glossary-img
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FAQs

The four codes are the Code on Wages, the Code on Social Security, the Industrial Relations Code, and the OSHWC Code, which consolidate 29 old laws to simplify compliance.

Notified for implementation starting November 21, 2025, as per government announcements.

Yes, gig and platform workers gain social security coverage via e-Shram registration and dedicated welfare funds.

Fixed-term employees become eligible for gratuity after completing one year of service.

The new codes require that basic pay constitute at least 50% of total remuneration, strictly cap allowances to enforce this ratio, and expand the "wages" definition to include additional components, directly affecting provident fund (PF) contributions and gratuity calculations.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.

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