India’s New Labour Codes 2025 bring together dozens of old labour laws into four simplified codes affecting wages, social security, industrial relations, and occupational safety.
These codes aim to ensure transparent wage structures, uniform rules, and a modern employment ecosystem.
These changes impact every category of worker, including corporate employees, factory workers, gig workers, and those in the unorganised sector.
Universal Minimum Wages & New Statutory Floor Wage
The government will now set a statutory floor wage based on minimum living standards.
States must ensure their minimum wages remain above the statutory floor wage, creating nationwide uniformity. For the first time, all employees, including unorganised-sector workers, are covered.
Uniform Definition of Wages to Impact Take-Home Salary
The new wage definition brings clarity. “Wages” will now include basic pay, dearness allowance, and retaining allowance.
At least 50% of total compensation must be basic pay, preventing companies from inflating allowances.
This change may lead to lower take-home salaries but higher PF and gratuity benefits, as per labour experts quoted in earlier policy discussions.
Gender Equality & Universal Wage Protection
The codes prohibit gender-based wage discrimination, ensuring equal pay for equal work.
Timely wage payment rules now apply to all employees earning up to Rs 24,000 per month, widening protection.
Work Hours, Overtime & Women Working at Night
The weekly cap remains 48 hours. Daily limits may be increased, but overtime must be paid at twice the normal rate.
Work-from-Home Recognised in Law
For the first time, work-from-home provisions are officially recognised, especially for services and IT sectors, giving companies and employees more flexibility.
Gig and Platform Workers Get Social Security
In a landmark move, gig and platform workers, drivers, delivery partners, and freelancers, will receive social security benefits.
Aggregators will contribute 1–2% of their turnover into a dedicated social-security fund.
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Industrial Relations: Higher Retrenchment Threshold & 14-Day Strike Notice
The threshold for requiring government approval for lay-offs, retrenchment, and closure has increased from 100 to 300 workers.
Employees must now give a 14-day strike notice, preventing sudden flash strikes.
Ease of Doing Business: Inspections Go Digital
The codes introduce an inspector-cum-facilitator system with web-based, algorithm-driven inspections, reducing harassment.
Compliance, from licenses to registers, is now digitised under the “One License, One Registration” rule.
Gratuity for Fixed-Term Employees
Fixed-term workers will now get gratuity on a pro-rata basis, without needing to complete five years.
Factory and Contract Labour Thresholds Raised
Factories with 20 workers (with power) and 40 workers (without power) will now come under the Factory Act.
The Contract Labour Act applies to establishments with 50 or more contract workers.
