Government implements new labour codes to create a modern and fair work system

In a historic decision, the Government of India announced that the four Labour Codes - the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020, and the Occupational Safety, Health and Working Conditions Code, 2020 - will be implemented from November 21, 2025, streamlining 29 existing labour laws.

By modernising labour regulations, enhancing workers' welfare, and aligning the labour ecosystem with the evolving world of work, this landmark move lays the foundation for a future-ready workforce and stronger, more resilient industries that drive labour reforms for Aatmanirbhar Bharat.

Many of India’s labour laws were framed in the pre-Independence and early post-Independence era (1930s–1950s), at a time when the economy and world of work were fundamentally different. While most major economies have updated and consolidated their labour regulations in recent decades, India continued to operate under fragmented, complex and in several parts outdated provisions spread across 29 Central labour laws.

These restrictive frameworks struggled to keep pace with changing economic realities and evolving forms of employment, creating uncertainty and increasing compliance burden for both workers and industry. The implementation of the four Labour Codes addresses this long-pending need to move beyond colonial-era structures and align with modern global trends. Together, these Codes empower both workers and enterprises, building a workforce that is protected, productive and aligned with the evolving world of work — paving the way for a more resilient, competitive and self-reliant nation.

Anshul Prakash, Partner at Khaitan and Co, said, "A moment long overdue. The face of labour reforms has seen the light of day today when the Four Labour Codes, which were assented to by the President of India nearly 6 years ago, have been given the force of law as of today. Part implementation for Code on Wages and Code on Social Security on expected lines. That said, much would now depend on the ground-level machinery of facilitators at the Central and State levels, who will be expected to approach the enforcement of these laws with a conciliatory mindset instead of that of prosecution for any non-compliance. Practical bottlenecks may come up in respect of Rules under these codes that would need to be made effective by respective State governments."

The labour ecosystem in India has changed significantly since the introduction of the new Labour Codes. Earlier, the system was scattered and uneven, and workers across many sectors did not receive explicit protections or written job documents. After the reforms, the rules have become more organised, giving workers stronger rights and employers clearer responsibilities.

Before the Labour Codes, many workers did not receive formal appointment letters. This meant they had no written proof of their job role, wages, or terms of employment. It often created confusion and left workers with little job security. After the reforms, every worker must receive a mandatory appointment letter. This written document increases transparency in the employment relationship and gives workers confidence and clarity about their jobs.

Earlier, social security benefits were limited to specific industries, leaving many workers out. Many gig workers, platform workers and informal labourers had no access to PF, ESIC or insurance. With the Code on Social Security, 2020, all workers are now included. They will be able to receive PF, ESIC benefits, insurance and other support systems that can protect them in emergencies. This marks a major step towards universal social protection.

Minimum wages in the earlier system applied only to scheduled industries. As a result, many workers did not receive fair pay. Under the Code on Wages, 2019, every worker has the right to minimum wages and timely payment. This ensures financial stability and helps workers plan their basic expenses with greater certainty.

Preventive healthcare was not part of the legal requirement for employers earlier. The new rules require employers to provide a free annual health check-up to all workers aged 40 or older. This encourages early detection of health issues and promotes a culture of prevention rather than treatment.

Payment of wages was another grey area earlier, as there was no strict rule enforcing timely payments. After the reforms, employers must pay wages on time, reducing stress among workers and improving their morale.

Women’s workforce participation is also expected to rise. Earlier, women were restricted from working at night or in certain occupations. Now, with their consent and proper safety measures in place, women can work in all sectors and on night shifts. This opens the door to better job opportunities and higher earnings.

ESIC coverage, once limited to specific areas and industries, has now been extended across India. Even establishments with a single worker in hazardous processes must provide ESIC benefits. This widens social protection for millions of workers.

Finally, compliance has become simpler. Instead of multiple registrations and returns under different laws, businesses now follow a single registration, one licence and one return system. This reduces paperwork and makes compliance easier for employers while ensuring workers receive the benefits they deserve.