Published On: March 15th 2026
Authored By: Ayushi Mishra
Renaissance Law College Indore Affiliated to DAVV
Abstract
Labour forms the most critical pillar of any national economy. Without an adequate and protected workforce, no country can sustain its infrastructure or achieve sustainable development. At every stage of work, across sectors ranging from construction to services, there exists a hierarchy that differentiates roles, responsibilities, and entitlements in terms of salary, wages, allowances, and other benefits.
The primary objective of implementing the New Labour Codes was to promote the growth and welfare of workers by providing proper facilities and addressing long-standing grievances relating to wages, social security, safety, and industrial relations. In the modern economy, the concept of the gig economy, encompassing short-term contract workers and platform workers, has also emerged as a pressing concern that the new codes seek to address.
Keywords: Workforce, Infrastructure, Allowances, Gig Economy, Platform Workers, Labour Codes, Social Security
I. Introduction
India’s labour law framework had long been governed by a fragmented web of 29 central statutes, many of which were enacted during or before the colonial era and had become increasingly difficult to administer in a modern economy. Recognizing the need for consolidation and modernization, the Government of India undertook a landmark reform by replacing these 29 laws with four comprehensive Labour Codes. These codes were notified on 21 November 2025, marking a transformative moment in India’s labour ecosystem.[1]
The four new Labour Codes are:
1. The Code on Wages, 2019
2. The Industrial Relations Code, 2020
3. The Code on Social Security, 2020
4. The Occupational Safety, Health and Working Conditions Code, 2020
Prior to independence, limited resources and a smaller population made the enforcement of comprehensive labour legislation less urgent. However, with India’s rapidly growing population and a shifting economic landscape, there arose a pressing need to revise laws that were no longer effective and to introduce new provisions capable of addressing contemporary labour concerns. The pre-existing laws were either outdated in scope, inconsistent in their definitions, or practically unenforceable. The four new codes seek to remedy these deficiencies by consolidating, simplifying, and modernizing the legal framework governing Indian labour.
II. The Four New Labour Codes, 2025
1. The Code on Wages, 2019
The Code on Wages, 2019 consolidates the following four earlier statutes:
1. The Payment of Wages Act, 1936
2. The Minimum Wages Act, 1948
3. The Payment of Bonus Act, 1965
4. The Equal Remuneration Act, 1976
Key Provisions:
The Code establishes a universal framework of minimum wages applicable to workers in both the organized and unorganized sectors. A significant innovation is the introduction of the concept of a “Floor Wage,” which sets the minimum threshold below which no state government may fix the applicable minimum wage. This measure is designed to ensure transparency and uniformity across states.[2]
The Code also lays down criteria for wage fixation. In consonance with Article 14 of the Constitution of India, which guarantees the right to equality, and Article 15, which prohibits discrimination on grounds of religion, race, caste, sex, or place of birth, the Code mandates gender equality in employment remuneration. Employers are further required to make timely payment of wages, prevent unauthorized deductions, and pay overtime compensation for work performed beyond regular hours. Penal provisions are included to address contraventions.
2. The Industrial Relations Code, 2020
The Industrial Relations Code, 2020 consolidates the following three earlier statutes:
1. The Trade Unions Act, 1926
2. The Industrial Employment (Standing Orders) Act, 1946
3. The Industrial Disputes Act, 1947
Key Provisions:
The Code introduces the concept of Fixed Term Employment, providing contractual workers with benefits at par with permanent employees for the duration of their engagement. It also establishes a framework for Trade Union recognition, under which a union that secures 51% membership is recognized as the Negotiating Union. The definitions of “worker” and “industry” have been broadened to bring more categories of employment within the Code’s ambit.[3]
The threshold for prior government approval in cases of layoff, retrenchment, or closure has been increased from 100 to 300 workers, with states retaining the discretion to fix the limit within this ceiling. Provisions have been included to ensure representation of women in the workforce and to recognize Work From Home arrangements as a legitimate mode of employment. Parties to an industrial dispute may approach the Industrial Tribunal directly within 90 days, and a mandatory notice period of 14 days applies before a strike or lockout may be called. The definition of “strike” has been expanded, and digital processes have been incorporated to streamline compliance.
3. The Code on Social Security, 2020
The Code on Social Security, 2020 consolidates nine earlier statutes, namely:
1. The Employees’ Compensation Act, 1923
2. The Employees’ State Insurance Act, 1948
3. The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952
4. The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959
5. The Maternity Benefit Act, 1961
6. The Payment of Gratuity Act, 1972
7. The Cine Workers Welfare Fund Act, 1981
8. The Building and Other Construction Workers’ Welfare Cess Act, 1996
9. The Unorganised Workers’ Social Security Act, 2008
Key Provisions:
The Code mandates that social security benefits be extended to all categories of workers, including gig workers, platform workers, and unorganized-sector workers. It covers provisions relating to life insurance, standard of living, Provident Fund (PF), and gratuity benefits. The scope of Employees’ State Insurance Corporation (ESIC) coverage has been widened, with particular attention to hazardous occupations and plantation workers.[4]
The time limit for Employees’ Provident Fund (EPF) inquiries has been fixed at five years, and recovery proceedings must be initiated within a specified period. The number of orders passed by the EPFO has been rationalized. A Self-assessment mechanism for construction cess has also been introduced.
Notably, the Code introduces new definitions for “gig workers” and “platform workers” and establishes a Social Security Fund to administer schemes providing health, life, and other benefits to this emerging class of workers. The definition of “dependants” has been broadened to widen the scope of family benefits. Wages under the Code are defined uniformly to include basic pay, dearness allowance, and retaining allowance.
In cases of workplace accidents, the Code provides for compensation. Fixed Term Employees are now entitled to gratuity benefits after one year of continuous service, as opposed to the earlier threshold of five years.
Other provisions include mandatory reporting of vacancies and an e-compliance framework.
4. The Occupational Safety, Health and Working Conditions Code, 2020
The Occupational Safety, Health and Working Conditions Code, 2020 consolidates 13 earlier central labour statutes. As its title suggests, the Code’s primary objective is to safeguard the health, safety, and working conditions of all workers.
Key Provisions:
The Code places an obligation on the government to ensure safe working conditions and protect the rights of workers, including by fostering a healthy and non-hostile work environment. Compliance obligations have been simplified, and electronic registration of establishments has been introduced in recognition of advancements in technology.[5]
The definition of “migrant worker” has been introduced to bring inter-state migrant labourers within a protective legal framework. Employers are required to provide appointment letters, and annual free health check-ups have been mandated for workers. Women employees are now expressly permitted to work night shifts, with safeguards to ensure their safety and security.
The definition of “media workers” has been expanded. Offenders causing harm to workers are liable to pay compensation equivalent to 50% of the assessed damages. The threshold for engaging contract workers has been raised from 20 to 50, and safety committees are required in establishments with 500 or more workers. The Code also specifies provisions governing overtime and permissible working hours.
III. Objectives of the New Labour Codes
The introduction of the four new Labour Codes in 2025 was guided by several overarching legislative objectives:
1. To replace outdated and fragmented labour laws with a consolidated and modernized statutory framework.
2. To promote employment opportunities and improve conditions of service for workers across all sectors.
3. To introduce clear and consistent definitions, thereby ensuring transparency and legal certainty.
4. To establish robust provisions for health, safety, social security, and wage uniformity, strengthening protections for workers at all levels.
5. To simplify regulatory compliance through the introduction of e-compliance mechanisms, reducing the burden on employers while improving enforcement.
IV. Conclusion
The implementation of the four new Labour Codes represents a watershed moment in the evolution of Indian labour law. By consolidating 29 pre-existing statutes into four comprehensive codes, the Government of India has sought to create a coherent, transparent, and enforceable legal framework suited to the demands of a modern and growing economy.
The reform addresses long-standing lacunae: wages were fragmented across four separate acts, social security did not extend to gig and unorganized workers, industrial dispute resolution was slow, and occupational safety norms were scattered and inconsistently applied. The new codes, taken together, represent a structural correction of these deficiencies.
Nonetheless, legislative reform is only the first step. The true test of the new Labour Codes lies in their implementation. Challenges relating to administrative capacity, awareness among workers, enforcement mechanisms, and judicial interpretation will determine whether the codes achieve their stated objectives of fairness, transparency, and inclusive economic growth. With sustained effort from government, industry, and civil society alike, the new Labour Codes have the potential to significantly transform India’s labour ecosystem for the better.
References
[1] Press Information Bureau, Government of India, Four Labour Codes: An Overview, dated November 21, 2025, available at https://static.pib.gov.in/WriteReadData/specificdocs/documents/2025/nov/doc20251121701501.pdf.
[2] PwC India, New Labour Codes: Tax and Compliance Implications, available at https://www.pwc.in/tax-knowledge-hub/new-labour-codes.
[3] ClearTax, New Labour Codes in India: Key Changes Explained, available at https://cleartax.in/s/new-labour-codes.
[4] Prompt Personnel, India’s New Labour Codes 2025: Key Changes and New Additions, available at https://www.promptpersonnel.com/indias-new-labour-codes-2025-key-changes-and-new-additions.
[5] SCC Online Blog, India’s Four Labour Codes: Overview Explained, dated November 29, 2025, available at https://www.scconline.com/blog/post/2025/11/29/india-four-labour-codes-overview-explained-scctimes/.
