India’s labor laws have been criticized for being outdated and complex. Many of these laws date back to the pre-Independence and early post-Independence era (1930s–1950s). The legal framework was fragmented, with 29 different laws governing social security, wages, industrial relations, and work safety. This has led to ambiguity and compliance challenges for both industries/ businesses and employees. The new Labour codes aim at simplifying and modernising Labour laws,. Addressing the old-fashioned/ outdated Labour laws that are  being complex and disorganised. A New Era for Workers and Industry has started.

A revision and re-evaluation of these laws was overdue. The outdated and complex nature of labour laws has been frequently criticised by many firms, labour groups, and organisations, who claim they are detrimental to the industry and its employees. Therefore, there was a need to revisit these laws.  

In this article, we are going to see what the four pillars of reform are, changes for workers, sector-specific changes, and end with a conclusion.

A Historic Turning Point – India’s Labour Codes: A New Era for Workers and Industry

The Government of India announced four Labour Codes on 21st November 2025, by consolidating 29 existing labour laws. This decision aims to simplify labour laws, improve workers welfare, and align with modern global trends. The move is a step towards building a skilled workforce and robust industries, promoting labour reforms for Aatmanirbhar Bharat (self-reliant India).

The Four  Labour Codes – Reform

The Labour Codes are built on four pillars, each addressing a critical dimension of employment:

1. Code on Wages (2019): Prompt Payments and Universal Minimum Wages.
2. Industrial Relations Code (2020): Simplified dispute resolution and flexible hiring.
3. Code on Social Security (2020): ‘Gig’, platform, and informal workers are now included.
4. Occupational Safety, Health and Working Conditions Code (2020): Stronger safety standards and preventive healthcare.

Together, they create a comprehensive labour architecture that benefits workers and industries/businesses.

Changes in the New Law Code for Workers

1. Appointment Letters: Every worker must receive a formal appointment letter (i.e. Letter of employment). Transparency, job security, and stable employment will all be guaranteed by written documentation.
2. Universal Minimum Wages: Every employee is entitled to a statutory minimum wage payment under the 2019 Code on Wages. Financial stability will be ensured via minimum wages and prompt payment.
3. Social Security Net: The Code on Social Security, 2020, ensures that all workers, including gig and platform workers, will receive social security coverage such as PF, ESIC, insurance, and other benefits.
4. Healthcare: Employers are required to provide free annual health check-ups to all employees over 40 years of age, to promote a culture of preventive healthcare.
5. Gender Equality: Women are allowed to work at night and in all types of jobs in any establishment as long as they take consent and safety measures are in place. This will provide women with equal opportunities to earn higher incomes in high-paying job roles.
6. Timely Wage payments: Employers must provide timely wages to ensure financial stability, reduce work stress, and boost worker morale.
7. Compliance Burden: The benefits of single registration, PAN-India single license, and single return in simplifying processes and reducing compliance burden.

Sector-Specific Changes – Highlights

There are some sector-specific New Labour Codes, which are as follows:

1. Fixed-Term Employees:

The full-time employees (FTEs) will now receive the same benefits as permanent workers, including leave, medical, and social security. Additionally, FTEs will be eligible for gratuity after just one year instead of five, and will receive equal wages as permanent staff, providing increased income and protection. These changes aim to promote direct hiring and reduce excessive contractualisation.

2. MSME Workers:

The Social Security Code, 2020, covers all MSME workers and guarantees a minimum wage for all employees. Workers will have access to facilities like canteens, drinking water, and rest areas. Provisions for standard working hours, double overtime wages, and paid leave are included, and timely wage payments are ensured.

3. Plantation & Mine Workers: For both (Plantation and Mine Workers), the protective equipment and safety measures are mandatory. Provision of protective gear is a must for both workers.

Workers and families get Employees’ State Insurance (ESI) medical facilities for Plantation workers. Education facilities for their children are also guaranteed for plantation workers.  

Annual Health Check-up is mandatory for Mine workers. To maintain health and work-life balance, work hours are limited to 8 to 12 hours per day and 48 hours per week.

4. IT & ITES Employees:

Salaries must be paid by the 7^th of every month. All businesses should allow women to work nights so they can have the chance to make more money. Timely Resolution of wage-related issues, harassment, and discrimination. Social security benefits are guaranteed via mandatory appointment letters and fixed-term employment.

5. Dock & Export Workers:  For both workers, there are Mandatory formal appointment letters along with Social Security Benefits.

Annual Health Check-ups are mandatory for Dock Workers. In order to guarantee good working conditions and safety, dock workers must have access to required medical facilities, first aid, sanitary and washing spaces, etc.

After 180 days of work in a year, every employee should be able to take yearly leave for Export Sector Workers. Every worker should be entitled to timely wage payments, no unauthorised wage deductions, and no wage ceilings.

Social Security Expansion

From 19% in 2015 to over 64% in 2025, India’s social security coverage has increased significantly. The Labour Codes’ capacity to transfer benefits between states and industries guarantees that gig and migratory workers are no longer left out.

Conclusion/ My perspective

This reform signifies a renewal of the social contract rather than just a change in law/ legal change. India is committed to ensuring a safe, productive, and future-ready workforce by enshrining equality, safety, and welfare in its laws.

The Codes are not without challenges; therefore, vigilance will be needed to execute these law codes across various businesses/ industries and states. However, the goal is evident: a New Era of labour governance in India has begun.

A historic convergence of worker rights and modern industry is represented by the Labour Codes. The vision is a future where all Indian workers – including gig workers, miners, women working nights, and IT specialists – are strong, safe, and respected. This is more than just a reform for better future.

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