India’s new labour law of 2025 marks the biggest overhaul of wages, social security, industrial relations and workplace safety, legally binding on all states.
India has entered a decisive new phase in its economic journey. With the enforcement of four consolidated labour codes on 21 November 2025, the country has attempted what policymakers have debated for nearly three decades: simplifying a maze of 29 antiquated labour laws into a coherent, modern framework. At its core, this reform is an effort to align India’s regulatory architecture with the realities of a young, mobile, digitally native, and increasingly diverse workforce that earns, works, and aspires.
To appreciate the scale of this shift, it helps to glance at where India’s labour laws come from and what they were never designed to handle.
A System Built for an Older India
Most of India’s labour laws were crafted in the mid-20th century, when industrialisation followed predictable patterns: factories, mills, mines, plantations, and office establishments. Work was stable, full-time, and overwhelmingly male. Over the decades, laws multiplied in response to specific demands, minimum wages here, contract labour there, maternity benefits elsewhere, until employers, workers, and even regulators found themselves navigating a labyrinth of overlapping rules.
By the late 1990s and early 2000s, the system was visibly misaligned. India was opening its economy, global investors were assessing risk, and organised industry was expanding faster than regulation could keep up. At the same time, an entirely new ecosystem was emerging: IT services, BPOs, e-commerce, and eventually gig and platform work. Millions of workers had entered the labour force through channels the law did not even recognise.
This mismatch produced a longstanding consensus: India needed fewer, clearer, more adaptable labour laws. But political sensitivity around labour rights repeatedly delayed the transition. The enforcement of the four codes marks the culmination of that long arc.
The Four Codes: What’s Actually Changing?
The new framework is structured around four pillars: wages, industrial relations, social security, and workplace safety. Each code introduces updates designed to correct historical gaps and reflect new forms of work.
1. Code on Wages: A Unified Floor of Fairness
The Code on Wages brings together four earlier laws, including the Minimum Wages Act and the Payment of Wages Act, into a single code.
Its most consequential shift is the introduction of a national floor wage, below which no state may set minimum wages. The aim is to reduce wide state-wise disparities and prevent wage suppression in low-income regions.
Another significant change is the standardised definition of “wages”, which now determines how employers structure salaries and calculate PF, gratuity, and bonuses. This is likely to reshape CTC packages across sectors and push more income into formal, benefit-linked components.
2. Industrial Relations Code: Flexibility Meets Regulation
The most debated element of the reforms is found here: companies with up to 300 workers (up from 100) can now retrench or close without prior government approval. Employers argue this will make hiring less risky, potentially increasing job creation. Trade unions, meanwhile, fear reduced job security and weakened bargaining power.
Alongside this, the code revises definitions of strikes, lockouts, and dispute-resolution mechanisms, a move intended to reduce sudden workplace disruptions and promote structured negotiation.
3. Social Security Code: Recognising the Invisible Worker
The most forward-looking component is the inclusion of gig and platform workers within social security frameworks. This is a historic expansion of formal recognition to a segment that has grown sharply over the past decade: food-delivery partners, ride-hailing drivers, freelancers, beauty-service professionals, warehouse pickers, and more.
The code enables these workers to access health cover, life and disability insurance, and maternity-related benefits through government contributions and digital platforms. In a country where nearly 90% of the workforce is informal, this marks a shift toward broader safety nets.
4. Occupational Safety, Health and Working Conditions Code: A Cleaner, Safer Workspace
The OSHWC Code creates uniform safety standards across industries, updating requirements that had long fallen behind modern workplace realities.
Key changes include:
- Mandatory annual health check-ups for specified categories of workers
- More explicit norms for ventilation, sanitation, drinking water, and welfare facilities
- The option for women to work night shifts with strict safety conditions
- A streamlined licensing framework for contractors operating across multiple states
In industries such as manufacturing, logistics, construction, and mining, these changes demand measurable improvements in compliance.
Why This Moment Matters
The significance of the new labour codes lies not only in what they change, but in when they arrive.
India’s workforce is one of the world’s youngest. Gen Z now accounts for a significant share of new labour-market entrants, often seeking flexible, gig-based, or hybrid employment rather than traditional full-time roles. Older laws did not reflect this shift.
The rise of e-commerce, logistics networks, and platform-based services has created millions of jobs, many outside conventional employer–employee definitions. Recognising these workers is an essential step toward formalisation.
The Push for Ease of Doing Business
Simplifying compliance has been a longstanding industry demand. The new codes aim to reduce paperwork, standardise definitions, and streamline approvals, especially for small- and mid-sized businesses that struggled with multiple jurisdictions.
Women’s Workforce Participation
The Code on Wages mandated equal pay for men and women for similar work, no discrimination in recruitment, promotions, transfers, or training. The new Social Security Code extends coverage to unorganised, gig, and platform workers (e.g., Swiggy, Urban Company). This is the first time gig-working women receive legal recognition for social protection.
With provisions enabling night shifts, expanding maternity leave to 26 weeks, providing maternity benefits, a Crèche facility for establishments with 50+ employees, mandatory yearly health check-ups, and workplace safety mandates. Work-from-home options may be offered after maternity leave (depending on mutual agreement).
This helps women balance work and motherhood without career penalties. The codes acknowledge that increasing women’s participation is not just socially important but also economically essential.
Implementation: The Real Test Ahead
Although the Union Government now enforces the new labour codes, their full impact will depend on how states operationalise them. Labour is a Concurrent List subject, meaning both the Centre and states have legislative powers; however, once Parliament enacts a central labour law, it becomes binding across the country. States cannot opt out of the codes, but they must frame their own rules and procedures under each code to bring them into day-to-day operation. As a result, while the legal framework is uniform nationwide, the speed and depth of implementation may vary from state to state depending on how quickly each state notifies its corresponding rules.
A New Beginning, Not the Final Word
India’s new labour codes represent a significant step toward modernising the country’s employment laws. They streamline complexity, expand social protections, and update the rules of engagement between employers and workers. The reforms will not solve every labour-market challenge, but they lay a foundation for a more transparent, equitable, and responsive system.
For workers, the promise is of clearer rights and greater security.
For businesses, the benefit lies in predictability and simpler compliance.
And for India, this reform is a signal that its regulatory frameworks must keep pace with the evolution of work itself.