Modern Labour Codes: Empowering Workers, Enabling Enterprise

The Ministry of Labour & Employment has issued a series of notifications bringing into effect key provisions of the following Codes under India’s new labour law framework w.e.f November 21, 2025. The main idea of these new codes is to simplify and modernize labour laws by making them more relevant to India’s current economic reality (with many gig workers, contract workers, MSMEs, informal workforce etc.) — while expanding protections, ensuring safety and social security, and reducing the regulatory burden on businesses

Key differences between the earlier Labour Laws and the New Labour Codes:

Code 1: The Code on Wages, 2019

The Code on Wages, 2019 (Wages Code) consolidates and modernises India’s wage regulations into a single statute, subsuming Four earlier legislations. Its primary objective is to guarantee fair, timely, and equitable payment to all workers, irrespective of sector or type of employment, while ensuring uniformity in definitions and introducing a national floor wage to strengthen wage security and reduce disputes.

1. The Payment of Wages Act, 1936;

2. The Minimum Wages Act, 1948;

3. The Payment of Bonus Act, 1965; and

4. The Equal Remuneration Act, 1976.

KEY HIGHLIGHTS:

1. Establishes a statutory right to minimum wages for all employees across both organized and unorganized sectors.

2. A statutory floor wage shall be set by the Government based on minimum living standards.

3. Determination of minimum wages considering workers’ skill levels, geographic areas, and job conditions such as temperature, humidity, or hazardous environments.

4. Gender Equality in Employment

5. Universal Provisions ensuring timely payment and preventing unauthorized deductions of salary.

6. Overtime Compensation at least twice the normal rates.

7. The traditional role of “Inspector” is replaced with “Inspector-cum-Facilitator.

8. First offence Compoundable by paying penalty, Repeated offence cannot be compounded.

Code 2: The Industrial Relations Code, 2020

The Industrial Relations Code, 2020 (IR Code) consolidates and amends Three existing laws on trade unions, retrenchment, and industrial disputes, providing uniform definitions. It is pro-labour, pro-employment, and pro-growth, fostering industrial harmony, inclusive participation, and ease of doing business.

1. Trade Unions Act, 1926;

2. The Industrial Employment (Standing Orders) Act, 1946 and

3. The Industrial Disputes Act, 1947.

This Code simplifies laws related to trade unions, conditions of employment in industrial establishment or undertaking, investigation, and settlement of industrial disputes.

KEY HIGHLIGHTS:

1. Fixed Term Employment (FTE): Allows time-bound contracts with full parity in wages and benefits. Allows gratuity eligibility after one year.

2. Re-skilling Fund: established to train Retrenched worker, contribution in fund equal to 15 days’ wages is to be made and payment to worker from the fund to be credited within 45 days of retrenchment in workers account.

3. Trade Union Recognition: 51% membership → Negotiating Union.

4. Threshold for lay-off/closure raised to 300 workers.

5. Expanded workers definition covers sales promotion staff, journalists, and supervisory employees earning up to ₹18,000/month

6. Work-from-home permitted by mutual consent.

7. Grievance committees with women’s representation.

8. Standing orders threshold: 100 → 300 workers.

9. Mandatory 14-day strike/lockout notice.

10. Industrial Tribunals for faster dispute resolution.

Strike includes “mass casual leave also within its ambit

11. Digital processes for record-keeping, registration, and communication for transparency and efficiency.

Code 3: The Code on Social Security, 2020

The Code on Social Security, 2020 (Social Security Code) consolidates Nine existing laws into one framework, ensuring universal protection and extending coverage to organised, unorganised, gig, and platform workers with digitisation and portability at its core. It modernise benefit schemes like Employee State Insurance Corporation (‘ESIC’) and the Employee Provident Fund (‘EPF’) , promotes ease of doing business through simplified compliance, and unifies diverse labour laws to expand worker benefits. By strengthening implementation with transparent digital systems, it balances social security with streamlined governance.

1. The Employee’s Compensation Act, 1923;

2. The Employees’ State Insurance Act, 1948;

3. The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952;

4. The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959;

5. The Maternity Benefit Act, 1961;

6. The Payment of Gratuity Act, 1972;

7. The Cine-Workers Welfare Fund Act, 1981;

8. The Building and Other Construction Workers’ Welfare Cess Act, 1996 and;

9. The Unorganised Workers’ Social Security Act, 2008.

KEY HIGHLIGHTS:

1. Expanded ESIC: now apply on establishment with less than 10 employees on voluntarily basis with mutual consent of employers and employees but mandatory apply on establishment having hazardous activity and plantation.

2. Time-bound EPF (Employees’ Provident Fund) Inquiries: within 5 years EPF inquiries and recovery proceedings, to be completed within two years (extendable by one).

3. Reduced EPF Appeal Deposit: need to deposit only 25% of the assessed amount.

4. Self-assessment for Construction Cess

5. Social Security Fund for unorganised, gig, and platform workers, covering life, disability, health, and old-age benefits has been established.

6. Definition of Dependents extended to maternal grandparents and in case of female employees it also includes dependent parents-in-law, broadening family benefit access.

7. Uniform Definition of Wages i.e Wages = Basic Pay + Dearness Allowance + Retaining Allowance

8. Commuting Accidents Covered: Accidents during travel between home and workplace are now deemed employment-related, qualifying for compensation.

9. Gratuity for Fixed-Term Employees: Fixed-term employees become eligible for gratuity after one year of continuous service.

10. Digitization of Compliance: Mandates electronic maintenance of records, registers, and returns, cutting costs and improving efficiency.

 Code 4: The Occupational Safety, Health and Working Conditions, 2020 (OSHWC Code)

The Occupational Safety, Health and Working Conditions Code, 2020 (OSHWC Code) unifies 13 labour laws into a comprehensive framework for workplace safety, health, and welfare. It establishes uniform standards including an 8 hour day/48 hour week baseline, mandatory appointment letters, and risk-based compliance. The Code applies across factories, mines, plantations, transport, and service sectors. By simplifying registration and inspections, it reduces regulatory complexity while strengthening worker protection and welfare facilities.

1. The Factories Act, 1948;

2. The Plantations Labour Act, 1951;

3. The Mines Act, 1952;

4. The Working Journalists and other Newspaper Employees (Conditions of Service and Miscellaneous Provisions) Act, 1955;

5. The Working Journalists (Fixation of Rates of Wages) Act, 1958;

6. The Motor Transport Workers Act, 1961;

7. The Beedi and Cigar Workers (Conditions of Employment) Act, 1966;

8. The Contract Labour (Regulation and Abolition) Act, 1970;

9. The Sales Promotion Employees (Conditions of Service) Act, 1976; The

10. Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979;

11. The Cine-Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981;

12. The Dock Workers (Safety, Health and Welfare) Act, 1986 and;

13. The Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996.

KEY HIGHLIGHTS:

1. Unified Registration

2. Extension to Hazardous Work even with one employee, engaged in hazardous or life-threatening occupations

3. Simple Compliance: Introduces one license, one registration, one return framework for the establishments.

4. Free annual health check-ups for employees.

5. Mandatory appointment letters specifying job details, wages, and social security will be given to enhance transparency and accountability

6. Women can work during night hours (7.00 PM to 6.00 AM) subject to their consent.

7. Media Worker definition includes Working journalists” and “cine workers” in electronic media and all forms of audio-visual production.

8. National Database for Unorganised Workers help to get jobs, map their skills and provide other social security benefits.

9. Compensation to victims/legal heirs in case of death, an amount equal to 50% of fine imposed on offender.

10. Safety committee : applicable on establishment having 500 or more workers.

11. Applicability: 20 workers in establishment with power and 40 workers in establishment without power.

12. Social Security Fund established for unorganised workers

13. Working Hours: 8 hours/day and 48 hours/week

14. Overtime: allowed only with worker consent and paid at twice the regular rate.

CONCLUSION:

New labour codes in India are likely to bring clearer wages, better safety, and wider social-security benefits to most workers, including those in small shops, factories, construction, and gig platforms like delivery and ride-hailing. People may see more timely payment of wages, mandatory appointment letters, safer working conditions, and access to insurance or pension schemes even for contract or temporary jobs. At the same time, employers may increasingly use fixed-term or contract roles, so job duration may vary, but workers will still receive full legal benefits during their employment.