India has undertaken one of the most sweeping labour reforms in its post-independence history. On 21st November 2025, the Government of India finally enforced the four amalgamated Labour Codes, replacing 29 obsolete labour laws with a uniform, modern regulatory environment. These New Labour Codes India might serve to bring a change to the labour landscape of the country by enhancing protection for workers, increasing social security, formalizing jobs, and making compliance easier for businesses.
The new framework, through a streamlined and technology-friendly system, addresses decades-old challenges like informality, inconsistent regulations, and complicated compliance procedures. It also brings India’s labour regime in line with global standards, advancing the cause of a more competitive and transparently inclusive economy.
This blog breaks down the key changes introduced under the unified labour code framework and highlights important new updates.
Overview of the Four New Labour Codes
Code On Wages, 2019
| FOCUS AREA | CODE OF WAGES, 2019 | EARLIER LAW |
| Applicability | Covers every category of employee across both organised and unorganised sectors. | The Minimum Wages Act, 1948 applied only on scheduled employments, limiting coverage. |
| Coverage | Covers all employees without any wage limit, including supervisor & managers | Applied to those employees drawing less than Rs.24,000/- for filing claim under Payment of Wages Act, 1936 |
| Floor Wages | Empowers the Central Government to prescribe a national floor wage, with the flexibility to vary it for different States or geographical zones. | The Minimum Wages Act had no mechanism for setting a floor-level wage across the country. |
| Time Limit for Wage Claims | Employees may raise wage-related claims within three years. | The Minimum Wages Act allowed claims only within six months. |
| Bonus Eligibility | Continues the statutory bonus range of 8.33%–20%, but leaves the wage eligibility limit to be notified by the appropriate Government for their jurisdictions. | Under the Payment of Bonus Act, eligibility was restricted to employees earning ₹21,000 per month or below. |
| Accounting Year for Bonus Calculations | Fixes a uniform accounting year from 1 April to 31 March, with no option to alter it. | Under the Payment of Bonus Act, employers were not tied to this cycle; the accounting year could differ, be changed once by the employer, and in some cases exceed a 12-month period. |
| Disqualification from Bonus | Disqualification includes all earlier listed misconducts (in the previous law) , with an added bar for employees convicted of sexual harassment. | Under the Payment of Bonus Act, 1965, employees were disqualified for acts such as fraud, theft, misappropriation, and riotous & disorderly behaviour leading to dismissal. |
| Bonus Liability During Dispute | When a dispute over higher bonus is sent for adjudication, the employer must still pay at least 8.33% as minimum bonus. | The Payment of Bonus Act, 1965 did not address this area. |
| Mode of Payment of Bonus | Bonus must be transferred directly to the employee’s bank account. | Payment could be made in cash. |
| Gender-Based Wage Discrimination | Explicitly bans discrimination in wages and hiring for identical or similar work, defining similar work in terms of comparable skill, effort, experience, and responsibility. | The Equal Remuneration Act, 1976 restricted discrimination only in wage payments. |
| Gender Bias in Recruitment | Prohibits gender-based discrimination in hiring, promotions, and transfers. | The Equal Remuneration Act, 1976 did not address this area |
| Registers & Returns | Requires maintenance of only two registers and filing of one consolidated return. | Mandated more than ten registers and four separate returns. |
| Territorial Jurisdiction of Inspector-cum-Facilitator | This area has not been addressed | Inspectors were appointed for specific geographic areas. |
Code On Social Security, 2020
| FOCUS AREA | CODE ON SOCIAL SECURITY, 2020 | EARLIER LAW |
| Maintenance of Registers and Records | Requires documentation on employee engagement, apprentice details, wages, hazardous incidents, injuries, vacancies, and mandatory notices. | The earlier law did not prescribe records in this manner. |
| Limitation Period for Assessment of Dues | Provident fund inquiries cannot begin after five years from the period in question. | No time limit under Section 7A of the EPF & MP Act. |
| Penalties for Non-Compliance | Penalties apply for failure to pay contributions, wrongful deductions, and non-submission of returns or reports. | Penalties existed under earlier statutes. |
| Enhanced Punishment for Repeat Offences | Provides stricter penalties for subsequent violations. | The earlier law did not address this area |
| Power to Reduce/Defer Contributions | The Central Government may defer or reduce employer/employee ESI or PF contributions for up to three months during pandemics or natural disasters. | The earlier law did not address this area |
| Misuse of Benefits | Establishments or individuals misusing benefits may be denied further entitlements. | The earlier law did not prescribe records in this manner. |
| Reporting Vacancies to Career Centres | Employers must notify the government before filling vacancies; exemptions include agriculture, domestic work, and engagements under 90 days. | Similar requirements existed under the Employment Exchanges (CNV) Act, 1959, but in a different form. |
| Registration of Unorganised, Gig, and Platform Workers | Worker registration is allowed upon production of basic documents including Aadhaar. | The earlier law did not address this area |
| Schemes for Unorganised, Gig, and Platform Workers | Provides ESI-related benefits for gig workers, platform workers, and their families based on contributions. | The earlier law did not address this area |
| Schemes for Gig and Platform Workers | Central Government may introduce schemes offering life and disability insurance, accident cover, health and maternity support, old-age protection, crèche facilities, and other benefits funded through a social security fund; a dedicated board will also be established. | The earlier law did not address this area |
| Welfare Schemes for Unorganised Workers | Central Government: May launch schemes covering life and disability insurance, health and maternity benefits, old-age protection, education, and other welfare measures.
State Governments: May introduce schemes for provident fund, employment injury compensation, housing, children’s education, skill enhancement, funeral support, and old-age homes. | The earlier law did not address this area |
| National and State Boards for Unorganised Workers | Establishes a 42-member National Social Security Board along with corresponding State Boards. | The earlier law did not address this area
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| Helplines and Facilitation Centres | Requires governments to set up toll-free helplines and facilitation centres for unorganised, gig, and platform workers. | The earlier law did not address this area |
| Registration and Cancellation of Establishments | Registration is required only if the establishment is not already registered under any other labour law. | Each Act mandated a separate registration. |
| ESI Corporation’s Rights When Employers Fail to Register | Allows the Corporation to recover expenses incurred for insuring an employee belatedly covered by a non-compliant employer. | The earlier law did not address this area |
| Liability for Excess Sickness Benefit Due to Poor Conditions | Owners of factories or tenements may be held liable when unsanitary conditions cause excessive sickness benefit claims. | The earlier law did not address this area |
| Presumption of Accident During Employment | Extends protection to individuals who may suffer injury during an accident, including those travelling in employer-approved vehicles from the workplace. | Similar provisions existed but were fragmented across sections. |
| Appointment and Powers of Inspector-cum-Facilitators | Inspectors also act as facilitators, guiding employers and workers on compliance in addition to inspections. | Inspectors were limited to inspection functions. |
| Appeals to Tribunal | Appeals relating to provident fund matters require depositing 25% of the disputed excess amount. | The requirement could go up to 75% under previous labour law |
| Funding of State Government Schemes | Schemes may be financed jointly by State contributions, worker contributions, and Central assistance. | The earlier law did not address this area |
Industrial Relations Code, 2020
| FOCUS AREA | INDUSTRIAL RELATIONS CODE | EARLIER LAW |
| Industry | Exclusions from the definition of ‘industry’ – Excluded Any capital has been invested for the purpose of carrying on such activity; or such activity is carried on with a motive to make any gain or profit, but does not include – (i) institutions owned or managed by organisations wholly or substantially engaged in any charitable, social or philanthropic service; or(ii) any activity of the appropriate Government relatable to the sovereign functions of the appropriate Government including all the activities carried on by the departments of the Central Government dealing with defence research, atomic energy and space; or(iii) any domestic service; or(iv) any other activity as may be notified by the Central Government. | Did not exclude, with the exception of domestic service, which was determined by judicial interpretations. |
| Employee | Introduced in the Industrial Relations Code, 2020. Includes any manual, operational, supervisory, management, administrative, technical, clerical, skilled, semi-skilled, or unskilled work done for pay or employment. | Never existed, with the exception of “workman,” which is not included in the Code. |
| Worker | This includes working journalists and sales promotion employees. | The Industrial Disputes Act only specified “workman,” while other pertinent Acts referred to “employee.” |
| Fixed Term Employment | Fixed term employment will be eligible to all statutory benefits including gratuity which will be available to them even for serving for one year. | The earlier law did not address this area. |
| Retrenchment | Excludes a worker’s service termination due to the end of their fixed-term employment. | The earlier law did not address this area. |
| Negotiating Union or Negotiating Council | By introducing the idea of a negotiating union or negotiating council, it has closed the loophole of taking use of the numerous unions within an establishment or organization. | The earlier law did not address this area. |
| Trade Union Forum For Appeal | Only the Tribunal may hear an appeal against non-registration or termination of registration. | It lies before the High Court also. |
| Industrial Tribunal | Would consist of two members to be appointed by the appropriate Government out of whom one shall be a Judicial Member and the other, an Administrative Member. | The Industrial Tribunal had just one member. |
| Flash Strike | It is completely prohibited. | There’s no such prohibition. |
| Prohibition Of Strike | If strikers decided to go on strike, they had to notify their employers at least 14 days in advance. This notice is good for up to 60 days. Strikes are forbidden while tribunal or arbitrator proceedings are pending. | Only in services provided by public utilities 14 days’ notice was required. |
| Re-Employment Of Retrenched Worker | Re-employment within a period of one year only. | There was no such period that was prescribed. |
| Prior Permission For Lay-Off, Retrenchment And Closure Of Industrial Establishment | Applies to a business with at least three hundred employees that isn’t seasonal or where work is done sporadically. | Applied for industrial establishment where 100 or more workers are employed |
| Composition Of Offences | Could be settled for a sum of 50% of the maximum fine allowed for such an offense, which is penalized by a fine alone, and for a sum of 75% of the maximum fine allowed for such an offense, which is punishable by either a fine or imprisonment for a maximum of one year. | The earlier law did not address this area. |
| Workers Reskilling Fund | Comprising contributions from an industrial establishment’s employer equal to fifteen days’ worth of wages that the employee had taken out just prior to the layoffs, or any other number of days that the Central Government may specify for each laid-off employee in the event of a layoff. | The earlier law did not address this area. |
Occupational Safety, Health And Working Conditions Code 2020
| FOCUS AREA | OSH CODE | EARLIER LAW |
| Registration | Every employer of any establishment to apply for registration digitally | Under each Act, separate registration was necessary. |
| Appointment Letter | Appointment letter to be issued to every employee | The earlier law did not address this area. |
| Rights Of Employee (Sec-14) | Every employee has the right to report to the Safety Committee and request information about their health and safety from their company. | The earlier law did not address this area. |
| Responsibility Of Employer | For maintenance of health, safety and working conditions of the employees. | There were different forms of this. |
| Daily And Weekly Hours Of Work | 48 hours per week and 8 hours each day
A journalist may work up to 144 hours over the course of four consecutive weeks and at least 24 hours over the course of seven consecutive days.
Particular provisions for holiday leave, casual leave, and other types of leave for working journalists and sales promotion employers. | The earlier law addressed this area.
The earlier law did not address this area.
The earlier law did not address this area. |
| Overtime Working | With the consent of the worker, overtime is allowed. | The earlier law did not address this area. |
| Notice Of Periods Of Work | Notice of the work time is displayed every day. | The earlier law addressed this area in different forms. |
| Annual Leave With Wages | One day out of every twenty days that he works | This was addressed in the earlier law as well. |
| Encashment Of Leave | Workers are entitled to encash leave above the ceiling as prescribed. | The earlier law did not address this area. |
| Employment Of Women During Night Shift | The employer may hire a female employee between 7 p.m. and 6 a.m., subject to conditions like working hours, holidays, and safety. | This was addressed in the earlier law. |
| Contract Labour | Licence for engaging contract labour can be obtained for working in more than one State, or for the whole of India, valid for a period of five years. | There is no such provision and validity of the license is 12 months. |
| No Recovery From Contract Labour | Neither directly nor indirectly may the contractor charge in full or in part, any commission or charge from Contract labour | The earlier law did not address this area.
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| Contract Labour in Core Activity | Permitted under certain conditions. | It exists unless prohibited by the government. |
| Welfare Facilities To Contract Labour | This is to be provided by the Principal Employer | Contractor responsible for providing welfare facilities to his contract labour. |
| Code Not To Apply in Certain Cases | Excavation of the mine is being done solely for prospecting, not to collect minerals for use or sale, according to the conditions mentioned, etc. | The earlier law did not address this area. |
| Employment Of Persons Below Eighteen Years Of Age (Sec.70) | Relates to the employment of persons below 18 years of age. It stipulates that no one under the age of 18 may work in any mine or part thereof; however, this age restriction does not apply to apprentices or other trainees. | This law existed in different formats earlier. |
| Employment Of Audio-Visual Worker | Employment under a defined written agreement that is registered with the appropriate authority. | The earlier law did not address this area. |
| Notices Of Certain Accident, Dangerous Occurrence And Diseases | Notices to the authorities and for diseases as specified under Third Schedule of the Code | This law existed in different formats earlier. |
| Welfare Facility in The Establishment | Employers are accountable for providing and maintaining any welfare amenities for their staff that may be mandated by the central government. | The earlier law addressed this area. |
| Registers And Records | The register and records are to be maintained by the employer. | This existed where it was required to maintain more than one register. |
| Factory License To Industrial Premises And Person. | No employer may use or permit the use of any location or property without a license. | Existed differently. |
| National Occupational Safety And Health Advisory Board | Central government to constitute the national occupational safety and health advisory board | The earlier law did not address this area. |
| Welfare Officer | On 250 workers in mines, factories, and plantations. | 500 workers in a factory. |
| Safety Committee And Safety Officer | On 500 employees in a plant. On 250 employees engaged in dangerous work. On 250 labourers engaged in construction. On 100 miners | On 1000 workers. |
| Special Powers Of Inspector-Cum-Facilitators | Actions to be taken in the event of a major hazard or impending threat in a mine or plant | Existed in a different form. |
| Offenses And Penalties | Increased penalties and different imprisonment terms for various violations. | Lower Penalties and Shorter Imprisonment Terms |
Key Changes in the New Labour Codes
- Universal Minimum Wages
- For the first time, minimum wages apply to all workers, regardless of sector or skill level – organized or unorganized.
- The Central Government will set a National Floor Wage. States cannot fix wages lower than this benchmark.
- A unified definition of “wages” reduces disputes related to bonus, overtime, and statutory contributions.
- Social Security Expansion
- Inclusion of gig workers, platform workers, and unorganized workers under social security schemes for the first time.
- A new National Social Security Board to frame welfare policies for these categories.
- Universal registration through a Social Security Account linked to Aadhaar.
- Expansion of ESIC coverage to more establishments and areas.
- Voluntary schemes for self-employed workers under EPFO and ESIC benefits.
- Mandatory Appointment Letters
- Employers have to ensure all employees get appointment letters outlining their pay, work schedule, leave policies, and terms of employment.
- Regardless of the size of the establishment, this obligation is applicable to all industries.
- Gender Inclusivity & Flexible Working Hours
- Women are now legally permitted to work night shifts (between 7 pm and 6 am), with their written consent and safety provisions provided such as transportation, security.
- All sectors have uniform policies on flexible work schedules and overtime.
- Provisions introduced to prevent discrimination in recruitment, wages, and working conditions.
- Layoff, Retrenchment & Closure Flexibility
- Only businesses with 300+ employees are now subject to the requirement for prior approval of layoffs, retrenchments, or closures (up from the previous limit of 100).
- Establishments below this size can make business decisions with fewer procedural barriers.
- A new Reskilling Fund will provide assistance to retrenched workers.
- Gig & Platform Worker Protections
- Gig and platform workers (rideshare drivers, delivery workers, online service providers, etc.) receive eligibility for social security benefits.
- Aggregator platforms may be required to contribute to a Social Security Fund.
- Interstate migrants are provided portability of benefits and identification.
- Improvements in Worker Safety, Health & Welfare
- Establishments with more than a prescribed number of employees are obligated to establish Safety Committees.
- Employers must provide free annual health check-ups.
- Commute-related accidents (while traveling to/from work) are now recognized for compensation.
- Inter-State migrant workers are protected with access to public distribution systems and social benefits in their destination states.
- Digitized registers ensure real-time safety monitoring.
- Digital Compliance & Simplification
- Single registration, single license, and single return for multiple regulations.
- Online appeals, digital inspection systems, and automated risk-based inspections.
- Unified labour compliance portals centralize filings and employee records.
Conclusion
November 21, 2025, is a milestone for labour regulations in India. We have seen misinformation and simplistic interpretations continue to emerge on the internet, particularly over social media. Therefore, we suggest businesses rely only on credible updates backed by experts in the field. Application of the Labour Codes becomes functional only when state-specific rules are duly framed. Till then, awareness is better than impulsive reactions.
Our experts at Prompt Personnel, one of India’s top labour law compliance experts for the last 28 years, will continue to track every official notification and offer lucid, accurate updates as the labour codes evolve.