India’s New Labour Code Reforms 2025: What Employers and Employees Must Know 

Introduction

As someone who works closely with compliance, I know how confusing India’s old labour laws used to be. There were too many rules, too many separate Acts, and most people were unsure which law applied to them. To solve this, the Government has now replaced 29 outdated labour laws with four new labour codes that are much simpler to understand and follow.

These new codes focus on clear wages, safer workplaces, wider social security coverage, and smoother processes for both employees and employers. In short, these reforms aim to protect workers better while making compliance easier for businesses.

Let’s understand these new labour codes in simple terms;

1. What are the new labour reforms 2025?   

On 21 November 2025, India removed 29 old labour laws and replaced them with four new labour codes. These are the Code on Wages, Industrial Relations Code, Social Security Code, and the Safety & Working Conditions Code.

These new laws promise timely salary, better safety, fixed working hours, faster benefits, and improved health services for workers.

Employees get: clear rights, timely payments, and stronger protection.
Employers get: simpler rules and one combined system instead of 29 separate laws.

2. Fixed-Term Employees will now get better benefits   

Fixed-term employees (temporary workers hired for a set duration) will now be treated almost the same as permanent staff. They will get leave benefits, medical cover, and social security. Gratuity will be available after just 1 year of service instead of 5 years. These workers must also be paid the same salary as permanent employees doing the same work.

Good for employees: more job security, stable income, and early gratuity.
Good for employers: freedom to hire skilled workers for short projects while keeping benefits transparent.

3. Gig & Platform Workers finally recognized under law   

For the first time, app-based workers like delivery partners, cab drivers, freelancers, and gig workers are officially included in labour protection. Companies called “aggregators” (like delivery apps) must now contribute 1–2 percent of their revenue to a welfare fund for these workers. Benefits will be linked to Aadhaar-based Universal Account Numbers, which stay with the worker even if they switch platforms or cities.

Workers get: social security, welfare funds, and benefits even if they move jobs or move states.
Companies get: clear rules and reduced confusion about gig worker responsibilities.

4. Minimum Wage and Timely Salary for All Workers   

The new labour code makes sure that everyone, including contract workers and unorganized workers, gets at least the minimum wage fixed for their state. Workers must also receive their salary on time; monthly wages must be paid within 7 days of the next month. If someone leaves the job, the pending salary must be cleared within 2 working days.

Employees get: guaranteed minimum salary and on-time payments.
Employers get: one simple national definition of “wages”, making compliance easier.

5. Equal Pay for Equal Work   

Men and women doing the same job must be paid the same salary. No company can pay less just because of gender. This helps reduce unfair wage gaps and keeps workplaces equal and transparent.

Employees get: fair salary without discrimination.
Employers get: clear rules reducing disputes or complaints.

6. Standard Working Hours & Overtime Rules   

The codes bring clarity to total working hours. While the 8-hour day stays, overtime must be paid fairly, and companies must give proper breaks, weekly offs, and ensure workers do not face overwork.

Employees get: fixed hours, proper rest, and paid overtime.
Employers get: clear structure to avoid legal penalties.

7. Better Safety and Workplace Facilities   

Under the Safety & Working Conditions Code, all workplaces must provide:

• clean drinking water

• hygienic toilets

• proper lighting

• safe machinery

• medical help

• protective equipment

This applies to factories, shops, construction sites, mines, and more.

Employees get: safer, healthier workplaces.
Employers get: clear guidelines, fewer accidents, and fewer legal issues.

8. Mandatory Appointment Letter for Every Employee   

Every worker must get a written job letter stating salary, role, work hours, benefits, and rights. This reduces confusion and gives both sides a clear agreement.

Employees get: proof of job and clarity of rights.
Employers get: written documentation to avoid disputes.

9. Social Security for More People (PF, ESIC, Insurance)   

The Social Security Code aims to bring more workers under PF, ESIC, insurance, maternity benefits, and pension support. Unorganized workers, gig workers, and temporary staff can now be included through government or aggregator contributions.

Employees get: long-term benefits and financial safety.
Employers get: unified rules instead of separate PF/ESIC laws.

10. Simplified Rules for Hiring & Firing (Industrial Relations Code)   

Companies with up to 299 employees can hire or remove staff without needing government approval, which earlier applied at 100 employees. This makes hiring easier but also means companies must follow a fair process.

Employees get: clarity and transparency in job contracts.
Employers get: flexibility in managing staff during changes.

What Benefits Employees and Employers get from new labour codes? 

What Ebizfiling  takes care to maintain these new labour codes?

At Ebizfiling, we follow the new labour codes by keeping our processes clean and transparent. We give proper appointment letters, ensure timely and correct wages, maintain safe working conditions, and handle PF, ESIC and other records correctly. We also keep our HR policies updated, follow clear working hours, and make sure every team member understands their rights and responsibilities.

Conclusion   

India’s new labour codes are a major step toward making work life clearer, safer, and fairer for everyone. With simple wage rules, better benefits, safer workplaces, and updated processes, employees now have stronger protection and more transparency. Simultaneously, employers get a cleaner, easier system to follow without the confusion of multiple old laws.

As these reforms roll out, both workers and companies need to understand their roles and responsibilities so they can adjust smoothly. When followed correctly, these new labour codes can create a workplace environment that is balanced, organized, and supportive for all.

Suggested Read :

Employee Provident Fund: Myths Related to EPF Returns 

Advantages of Using PEO Services for for Employees and Employers

Difference Between PF and ESI

Hiring for remote work and their possible solutions

FAQs