Four Labour Codes Now in Effect: What’s Changing and How It Impacts Workers

The most-awaited labour reform came into effect on 21 November 2025, when the Government of India implemented four landmark labour codes — the Code on Wages (2019), the Industrial Relations Code (2020), the Code on Social Security (2020), and the OSHWC Code (2020). It is hailed as the most far-reaching labour reforms since independence. These codes consolidate 29 central labour laws, streamline compliance, and broaden worker safeguards. For workers and employers alike — particularly in gig work, contract labour, MSMEs and export-driven sectors — the new framework promises greater formalisation, clearer norms and enhanced social security.

What the New Codes Mean for India

The labour regulatory framework in India had grown over decades into a fragmented system—multiple laws drafted in the 1930s-50s, overlapping rules, variable enforcement and limited coverage of informal or gig workers. The new codes aim to replace this patchwork of laws with a unified, modern framework that aligns with international standards and covers a much wider range of workers, including migrants, gig workers and those in the unorganised sector.

Key Before-and-After Shifts

• Previously, mandatory appointment letters were rare; now all workers must receive one.
• Social security coverage was limited; under the Code on Social Security 2020, all workers, including gig and platform workers, are to receive PF, ESIC and insurance coverage.
• Minimum wage laws covered only scheduled employment; now the Code on Wages 2019 gives a statutory right to minimum wages to all workers.
• Health check-ups: employers must now provide free annual health check-ups for workers aged 40 or older.
• Women’s employment: previous restrictions on night work and certain job categories have been relaxed, subject to proper consent and safety measures.
• Compliance burden for employers: from multiple registrations, licences and returns to a single registration, licence and return system.

Who Benefits and What Workers Must Know

The article breaks down major categories of workers and how the reforms will impact them.

1. Fixed-Term Employees (FTE): Fixed-term employees will now enjoy the same benefits as permanent workers: leave, medical, social security, gratuity eligibility after just one year instead of five; equal wages for equal work.  This is significant for short-duration contracts and project-based roles.
2. Gig & Platform Workers: For the first time, gig and platform workers (and aggregators) have legal recognition. Aggregators may be required to contribute 1-2% of annual turnover towards worker social security, capped at 5% of payouts. The use of an Aadhaar-linked Universal Account Number aims to help the portability of benefits across states.
3. Contract Workers: Contract labour protections are strengthened: principal employer must provide health and social-security benefits; a free annual health check-up is mandated; gratuity eligibility is reduced to one year.
4. Women Workers: Legal prohibition on gender discrimination; equal pay for equal work; permission to work night shifts and in all job categories, including underground mining with consent and required safety measures; mandatory representation of women on grievance committees.
5.  Youth Workers: Young workers will benefit via guaranteed minimum wages for all, mandatory appointment letters (to build work history), and mandatory payment of wages even during leave.
6.  MSME Workers: Workers in micro, small and medium enterprises will get access to social security coverage, minimum wages, welfare facilities (canteens, drinking water, rest areas) and standardised working hours, paid leave and timely wage payments.
7. Traditional/Informal Sectors (like Beedi & Cigar, Plantations, Textiles): Sectors that have long operated informally now receive statutory protections: minimum wages, overtime, safety norms, free health check-ups, portability for migrant workers, claim pending dues up to 3 years, etc.

Additional System-Wide Reforms

•  Introduction of a National Floor Wage to ensure no worker falls below a living wage. 
•  Gender-neutral protections, including for transgender workers.
• “Inspector-cum-Facilitator” regime for compliance rather than purely punitive checks. 
• Two-member Industrial Tribunals for faster dispute resolution. 
• National OSH Board to harmonise safety standards. 

What Workers Must Keep in Mind

• Employers must issue written appointment letters; workers should ask for and retain them.
• Verify eligibility for social security benefits (PF, ESIC, insurance) even for gig/platform roles.
• Minimum wages now apply to all workers should check that their wages are compliant with the new codes.
• If over 40 years of age, ensure the employer arranges a free annual health check-up.
• Women employees engaged in night shifts or previously restricted categories should ensure proper consent and safety arrangements.
• Contract and fixed-term workers must check that they are receiving benefits equivalent to permanent employees, where applicable.
• In informal or unorganised sectors, workers should understand their new rights: overtime pay, welfare facilities, and portability of benefits in case of migration.
• For all workers: registration, licence and returns will become simpler for employers, but workers should keep track of filings and maintain records of wage payments, hours worked, overtime, and leave.
• While the codes are now in force, rules and schemes under each code will be framed and refined in consultation with stakeholders. During transition, legacy laws may still apply till phased out.

Conclusion

India’s four new labour codes streamline old laws to strengthen worker protection, expand social security and simplify compliance. They offer gig, contract, migrant, women, youth and MSME workers better rights and standards. Workers, however, must stay informed, keep documentation and ensure employer compliance. Despite a transition period, the reforms laid a foundation for a more modern and equitable labour system.