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The Government of India has taken a historic step by enacting four comprehensive Labour Codes, effective from November 21, 2025. This significant reform consolidates 29 Central labour laws into a single, streamlined regulatory framework that covers wages, industrial relations, social security, and occupational safety and health. These Codes, The Code on Wages, 2019; The Code on Social Security, 2020; The Occupational Safety, Health and Working Conditions Code, 2020; and The Industrial Relations Code, 2020, aim to simplify labour laws, reduce administrative burdens, and enhance enforcement through uniform definitions and streamlined processes. This marks a paradigm shift to a facilitation-based approach that balances worker welfare with operational efficiency. Labour being a Concurrent subject, both the Central and State Governments are empowered to make rules. The Central Government and most States have pre-published draft rules, with a few exceptions.
The Codes expand protections to include unorganized workers, gig workers, and platform workers, ensuring statutory minimum wages, timely payments, social security benefits, and improved occupational safety standards. Notably, the Social Security Code creates a fund dedicated to the welfare of unorganized, gig, and platform workers. These reforms lay the foundation for a modern, inclusive, and robust labour market promoting ease of compliance, protecting workers' rights, and supporting India's sustainable economic growth trajectory.
- SCOPE OF NOTIFICATIONS AND APPLICABILITY
|
Code |
Status as of 21 Nov 2025 |
Notes |
|
Code on Wages, 20191 |
Partially notified |
Multiple sections relating to definitions, wage & bonus entitlements, payment timelines, and enforcement are effective. |
|
Code on Social Security, 20202 |
Partially notified |
Provisions relating to Employee State Insurance (ESI),
maternity, gratuity, and governance bodies are now active. |
|
Industrial Relations Code, 20203 |
Fully notified |
All provisions relating to trade unions, standing orders, dispute resolution, and retrenchment requirements are effective. |
|
Occupational Safety, Health and Working Conditions Code, 20204 |
Fully notified |
Mandates on working hours, health & safety, registers, and employer obligations are effective. |
- LABOUR AT THE CORE OF INDIA'S GROWTH
The labour sector continues to be the cornerstone of an empowered, prosperous India, playing a crucial role in the nation's socio-economic transformation. Employment in India has witnessed significant expansion, growing from 47.5 crore in 2017-18 to 64.33 crore in 2023-24, an addition of 16.83 crore jobs within just six years. This robust job creation has been accompanied by a sharp decline in the unemployment rate from 6.0% to 3.2% over the same period, reflecting stronger absorption of the workforce into productive employment. Furthermore, women's participation in the formal workforce has increased substantially, with 1.56 crore women joining, underscoring the government's focus on inclusive labour empowerment. Alongside these gains, vital labour market indicators demonstrate improving labour force dynamics: the Labour Force Participation Rate (LFPR) for individuals aged 15 years and above rose from 49.8% in 2017-18 to 60.1% in 2023-24, while the Work Participation Rate (WPR) increased from 46.8% to 58.2%. Employment patterns are shifting towards more stable and entrepreneurial forms of work, with self-employment rising from 52.2% to 58.4% and casual labour decreasing from 24.9% to 19.8%. Youth unemployment rates have also improved, falling from 17.8% to 10.2%, positioning India below the global average.
These positive trends are supported by emerging sectors such as technology-driven start-ups, global capability centres, e-commerce logistics, and renewable energy, providing a diversified array of employment opportunities. Government initiatives promoting social security coverage and digital enrolment have further enhanced workforce formalization with rising participation in schemes such as the Employees' Provident Fund. Together, these developments signify a more inclusive, resilient, and future-ready labour market pivotal for sustained economic growth and social welfare in India.5
- KEY PROVISIONS IN FORCE AND EMPLOYER CONSIDERATIONS
|
CODE ON WAGES, 2019 (WAGES CODE) |
||
|
Section(s) |
Key Provisions in Force |
Key Areas for Employers to Look Out For |
|
Sections 1 to 41 |
Provisions relating to definitions, prohibition of gender-based discrimination, fixation of minimum wage rates by the appropriate government, fixation of hours for normal working day and wage periods, wages for overtime work, fines and deductions, and statutory bonus. |
- State rules prescribing hours of work and their interplay with state-specific shops and establishments law (for commercial establishments) - Fixation of a floor wage rate by the Central Government - Impact on timing of payment of wages as part of full and final settlement upon employee exit due to application of payment of wages chapter to all employees irrespective of role or wages - Impact on kinds and extent of deductions from wages - Notifications by relevant governments on eligibility for statutory bonus coverage |
|
Sections 42(4) to 42(9) |
Provisions relating to the constitution of a State Advisory Board for fixing minimum wage rates. |
- Await constitution of State Advisory Boards |
|
Sections 43 to 66 |
Provisions relating to payment of undisbursed dues in case of employee death, procedure to determine claims, penalties, compounding of offences, and records, returns, notices. |
- Impact of payment of wages provisions applying to all employees - Rules to be notified by governments on procedural compliance |
|
Sections 67(1), (2)(a) to (r), (u) to (zc), (3) to (5) |
Provision concerning the power of the appropriate government to make rules. |
- Monitor rules notification and compliance requirements |
|
Section 68 |
Provision concerning the power of the Central Government to remove difficulties. |
- Follow government directives for resolving difficulties |
|
Section 69 |
Repeal of Payment of Wages Act 1936, Minimum Wages Act 1948 (except some central government-specific sections), Payment of Bonus Act 1965, and Equal Remuneration Act 1976. |
- Transition from repealed legislation to new Code provisions |
|
CODE ON SOCIAL SECURITY, 2020 (SS CODE) |
||
|
Section(s) |
Key Provisions in Force |
Key Areas for Employers to Look Out For |
|
Sections 1 to 41 |
Provisions relating to definitions, prohibition of gender-based discrimination, fixation of minimum wage rates by the appropriate government, fixation of hours for normal working day and wage periods, wages for overtime work, fines and deductions, and statutory bonus. |
- State rules prescribing hours of work and their interplay with
state-specific shops and establishments law (for commercial
establishments) |
|
Sections 42(4) to 42(9) |
Provisions relating to the constitution of a State Advisory Board for fixing minimum wage rates. |
- Await constitution of State Advisory Boards |
|
Sections 43 to 66 |
Provisions relating to payment of undisbursed dues in case of employee death, procedure to determine claims, penalties, compounding of offences, and records, returns, notices. |
- Impact of payment of wages provisions applying to all
employees |
|
Sections 67(1), (2)(a) to (r), (u) to (zc), (3) to (5) |
Provision concerning the power of the appropriate government to make rules. |
- Monitor rules notification and compliance requirements |
|
Section 68 |
Provision concerning the power of the Central Government to remove difficulties. |
- Follow government directives for resolving difficulties |
|
Section 69 |
Repeal of Payment of Wages Act 1936, Minimum Wages Act 1948 (except some central government-specific sections), Payment of Bonus Act 1965, and Equal Remuneration Act 1976. |
- Transition from repealed legislation to new Code provisions |
|
THE INDUSTRIAL RELATIONS CODE, 2020 |
||
|
Section(s) |
Key Provisions in Force |
Key Areas for Employers to Look Out For |
|
All provisions |
The Industrial Relations Code, 2020, consolidates and amends laws relating to trade unions, conditions of employment in industrial establishments, and the resolution of industrial disputes. It covers definitions, the formation and functioning of grievance redressal committees, recognition of negotiating unions or councils, and framing of standing orders. The Code establishes dispute resolution mechanisms and mandates advance notice for changes to employment terms. It prohibits strikes and lock-outs without prescribed notice and regulates layoff, retrenchment, and closure with revised thresholds. |
The calculation of retrenchment compensation is affected by the revised definition of 'wages', which now requires compensation to be based on 15 days' average pay for every completed year of continuous service, including one month's notice or wages in lieu of notice. |
|
THE CODE ON OCCUPATIONAL SAFETY, HEALTH AND WORKING CONDITIONS, 2020 |
||
|
Section(s) |
Key Provisions in Force |
Key Areas for Employers to Look Out For |
|
All provisions |
The provisions cover definitions, registration of establishments, and regulations on daily and weekly working hours and leave entitlements. They address night shifts and the engagement of interstate migrant workers. The Code prohibits the employment of contract labour in core activities, including sectors such as mines, audiovisual production, beedi and cigar manufacturing, building and construction, and factories. It also encompasses penalties and provides for compounding of offences. The Code repeals earlier legislations including the Factories Act, 1948; Contract Labour (Regulation and Abolition) Act, 1970; Inter-State Migrant Workmen Act, 1979; Building and Other Construction Workers Act, 1996; Mines Act, 1952; Dock Workers (Safety, Health and Welfare) Act, 1986; Plantations Labour Act, 1951; Working Journalists and Other Newspaper Employees Act, 1955; Working Journalists (Fixation of Rates of Wages) Act, 1958; Motor Transport Workers Act, 1961; Sales Promotion Employees Act, 1976; Beedi and Cigar Workers Act, 1966; and Cine Workers and Cinema Theatre Workers Act, 1981. |
(a) The inclusion of an establishment's own employees, in addition to contract workers, within the definition of "interstate" migrant worker' extends the scope of journey allowance payments to a broader group of workers. (b) The prohibition on employing contract labour in the core activities of an establishment significantly limits the reliance on third-party personnel for essential functions, encouraging regular employment for such roles. (c) The relevant government will issue rules regulating hours of work, ensuring coordination and consistency with provisions under state-specific shops and establishments' laws. (d) Annual leave entitlements granted under the OSH Code will harmonize with those under existing state-specific shops and establishments laws, allowing for coordinated leave management. (e) The relevant government will also notify procedural compliance rules, establishing clear guidelines for employers to follow under the new regulatory regime. |
- COMMENTS
Building upon this transformative momentum, the labour codes are designed to address longstanding challenges in India's employment ecosystem by integrating digital technologies for compliance monitoring and dispute resolution, thereby reducing bureaucratic delays and fostering a culture of proactive labour law adherence. They introduce progressive safeguards for emerging workforce segments such as gig, platform, and fixed-term workers, ensuring that social security and welfare benefits extend beyond the traditional employer-employee paradigm. Moreover, enhanced provisions for occupational safety and health signal the government's commitment to improving workplace conditions, while industrial relations reforms promote harmonious negotiations through streamlined recognition and grievance mechanisms. These changes collectively aim to attract greater domestic and foreign investment by providing a transparent and predictable legal environment, thus catalysing job creation and economic diversification.
As the Central and State governments operationalize detailed rules and guidelines in the months ahead, stakeholders, including employers, workers, and regulators, must engage collaboratively to navigate the transition effectively. The labour codes not only simplify the complex web of labour regulations but also embody a forward-looking vision that aligns India's labour framework with global best practices. This fosters a resilient and competitive labour market capable of supporting sustainable growth well into the future. While comprehensive instructions and supporting rules are awaited from the Central and State governments, compliance mechanisms under the new codes have already been activated. Stakeholders are encouraged to proactively engage with the evolving regulatory landscape to ensure seamless transition and adherence to the updated legal framework.
Footnotes
1 Gazette ID:- CG-DL-E-21112025-267885, https://egazette.gov.in/(S(bf1xib4kf02toglv43grrrnc))/ViewPDF.aspx
2 Gazette ID:- CG-DL-E-21112025-267882, https://egazette.gov.in/(S(bf1xib4kf02toglv43grrrnc))/ViewPDF.aspx
3 Gazette ID:- CG-DL-E-21112025-267883, https://egazette.gov.in/(S(bf1xib4kf02toglv43grrrnc))/ViewPDF.aspx
4 Gazette ID:- CG-DL-E-21112025-267884, https://egazette.gov.in/(S(bf1xib4kf02toglv43grrrnc))/ViewPDF.aspx
5 https://www.pib.gov.in/PressReleasePage.aspx?PRID=2192524
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