New Labour Codes Reshape Worker Rights, Social Security, and Wage Rules

In a landmark move, the government has implemented the Four Labour Codes, the Code on Wages (2019), Industrial Relations Code (2020), Code on Social Security (2020), and Occupational Safety, Health and Working Conditions (OSHWC) Code (2020), repealing and rationalising 29 existing central labour laws.

“These reforms are not just ordinary changes, but a major step taken by Prime Minister Shri Narendra Modi for the welfare of the workforce,” Union Labour and Employment Minister Mansukh Mandaviya wrote on X. “These new labour reforms are an important step towards a self-reliant India and will give new momentum to the goal of a developed India by 2047.”

What Changes Under the New Law?

Under the new regime, fixed-term employees will become eligible for gratuity after one year of service, social security coverage has been expanded to micro, small and medium enterprises (MSMEs), and gig and platform workers have been given formal recognition for the first time. The Codes also mandate annual health check-ups in several sectors, strengthen workplace safety standards, and guarantee timely payment of wages.

India’s Labour Laws

Many of India’s labour laws were framed decades ago — during the pre-Independence and early post-Independence era — when the economy was at a nascent stage with very different employment realities. While most major economies have updated and consolidated labour regulations over the years, India continued to operate under a fragmented, complex, and outdated legal framework that often restricted new forms of employment and created uncertainty for both workers and industry.

The four new Labour Codes aim to address long-standing gaps, simplify compliance, and align India’s labour landscape with modern global standards. The reforms are also positioned as part of the broader push toward economic resilience and self-reliance under the Aatmanirbhar Bharat vision, ahead of India’s independence centenary in 2047.

Employee Benefits

1. Minimum Wage Guarantee

Under the Code on Wages, 2019, all workers are entitled to a statutory minimum wage, ensuring financial security and timely payment. Previously, minimum wages applied only to scheduled industries, leaving a significant portion of the workforce uncovered. The new norms make timely wage payments mandatory, improving income stability, reducing workplace stress, and boosting morale.

2. Women’s Workforce Participation

The new Codes allow women to work at night and in all types of jobs across establishments, subject to their consent and safety measures. This opens access to higher-paying roles and enhances economic participation. Earlier, night-shift employment and certain occupations were restricted for women.

3. Expanded Social Security

The Code on Social Security, 2020, extends benefits such as provident fund (PF), Employees’ State Insurance (ESIC), and insurance to all workers, including gig and platform workers. Under previous laws, coverage was significantly limited.

4. Formalisation of Employment

Mandatory appointment letters for all employees will ensure transparency, job security, and clear terms of employment, a step toward formalising India’s workforce.

The new Labour Codes mark one of India’s most significant workforce reforms in decades, aiming to balance worker protection with the needs of a rapidly modernising economy. While effective implementation will determine the true impact of these changes, the new framework lays the groundwork for greater formalisation, improved labour standards, and a more competitive business environment.

As India positions itself for its 2047 growth vision, these reforms are expected to play a central role in shaping a more secure, productive, and future-ready workforce.