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

Introduction

India has entered a new phase of labour governance with the introduction of four new labour codes. These labour code reforms India 2025 aim to create uniformity, clarity, and transparency for both employers and employees. The government has combined 29 separate labour laws into four structured codes, forming a single organised system that reduces confusion and ensures better protection for workers.

What Are the Four Labour Codes and Why Were They Introduced?   

The objective of the new labour code reforms is to simplify older laws that had become difficult to manage. Many organisations struggled because different laws had different definitions and processes. The government has now brought all these areas into four clear codes that make compliance more predictable.

According to the official press release on the PIB website, the new structure aims to modernise labour rules and extend protections to workers who were earlier left out.

The four codes are:

1. The Code on Wages 2019: This code brings wages, bonus, and equal pay under one umbrella. Earlier, wage definitions differed from law to law. With the new code, every worker will receive wages based on a common rule. A national floor wage will guide payments across the country, which prevents unfair low wages for young or vulnerable workers.
2. The Industrial Relations Code 2020: This code integrates laws related to trade unions, industrial disputes, and workplace closures. It tries to create smoother employer and employee relationships by making dispute handling more structured. The code attempts to reduce conflicts by clearly defining how layoffs, retrenchments, and dispute resolutions must take place.
3. The Social Security Code 2020: The Social Security Code combines EPF, ESI, gratuity, maternity benefits and other welfare schemes. It extends social security to more categories of workers, including gig workers and platform workers. The introduction of an Aadhar linked Universal Account Number helps workers access benefits anywhere in the country without paperwork delays.
4. The Occupational Safety, Health, and Working Conditions Code 2020: This code deals with working hours, annual health checks, safety rules, leave, welfare facilities, and employment conditions. The goal is to create safer and healthier workplaces across sectors, including those where conditions were not regulated earlier.

How These Labour Codes Improve Worker Protection ?  

• The labour code reforms India 2025 introduce several important changes that directly impact the workforce. Many of these updates respond to the needs of workers who were not covered under older laws.

• Gig workers and platform workers have been officially defined for the first time. They will now receive accident compensation and access to a welfare fund. Their benefits will be linked to their Aadhar based Universal Account Number, making portability simple across states.

• Workers in the audio visual and media sector will now receive written appointment letters, and their overtime will be based on consent and paid at double the regular wage rate. This gives clarity to a sector where informal contracts were common.

• Young workers cannot be paid less than the floor wage. This ensures fair earnings for those who are new to the workforce.

• Textile workers will receive equal wages, welfare support and double wages for overtime. Their pending dues can now be settled for up to three years, which is a significant improvement for an industry that often faces delayed payments.

• Women employees will receive equal pay for equal work, 26 weeks of paid maternity leave and a maternity bonus of 3500 rupees. This ensures a better balance between work and parenthood.

• Plantation workers will now fall under the Social Security Code and the OSHWC Code. This means their families can receive ESI medical support and education benefits. The code applies to plantations with more than ten workers or plantations spread across five hectares or more.

• MSME workers will have standard working hours and will get double wages for overtime. Paid leave becomes a clear right across small and medium establishments.

• Mine workers will receive free annual health check ups and will work only an eight hour shift. Workers exposed to hazardous processes will be eligible for ESI coverage even if there is only one employee in that unit. Safety committees will also be formed to monitor operations.

• IT sector workers will now receive salary by the seventh of every month. Fixed term employees in this sector will receive mandatory appointment letters to avoid disputes.

• Fixed term employees across all sectors will become eligible for gratuity after completing one year of continuous service. This gives them benefits that were earlier limited to permanent employees.

• Dock workers will receive employer funded annual health check ups and will be covered under provident fund, pension and insurance benefits.

• Workers in the bidi and cigar industry will now receive minimum wages, fixed working hours and double wages for overtime. They will also be eligible for bonus after completing thirty days of work.

Why Employers Should Pay Attention to the Labour Code Reforms ?

The new labour codes are not just for workers. They also set clear expectations for employers. Organisations will need to revisit their HR policies, payroll structures and workplace rules to align with the Code on Wages, the Social Security Code and safety guidelines. Since these codes aim to create uniform definitions and simplified compliance, businesses that adopt the new rules early will reduce the risk of disputes and penalties.

Employers now need to maintain accurate records, issue proper appointment letters, follow standard working hours, and ensure safety compliance. This is also a good time for HR teams to review employment contracts, overtime structures, and benefits policies.

How Employers Can Prepare for Compliance ?

The transition to the four labour codes will require a careful review of internal systems. Employers should begin by updating wage calculations as per the Code on Wages. Social security registrations for EPF and ESI must match the requirements under the Social Security Code. Workplace safety rules, health check ups and welfare measures should meet the standards of the OSHWC Code.

HR and payroll teams must be trained on the new labour law update India 2025 so that the company maintains transparency in payments, leaves and safety compliance.

For official reference, employers can check these links:

• PIB Release: www.pib.gov.in/PressReleasePage.aspx?PRID=2192524

• FAQ on labour codes: https://email.gov.in/service/home/~/?auth=co&loc=en&id=810889&part=3

• Pamphlets: https://email.gov.in/service/home/~/?auth=co&loc=en&id=810889&part=2

How Ebizfiling Helps with Labour Code Compliance ?  

Ebizfiling supports businesses in understanding and adapting to the new labour code reforms. Our team guides employers on wage structures, social security updates and compliance policies that need revision under the new rules. We help organisations review documents, update HR practices and stay aligned with government requirements so that compliance becomes easier and risk free.

Conclusion   

The labour code reforms India 2025 mark a major step in creating a simple, fair and modern labour system. Workers across sectors will now receive stronger protection, and employers will operate under clearer rules. As India continues to modernise its labour framework, these four labour codes create a balanced environment where compliance becomes easier and worker benefits become more accessible.

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