A simple guide to India’s four new labour codes. Learn how they replace 29 laws, introduce a national floor wage, expand social security and change workplace rules for workers and employers across India.
Introduction
If you're working in India or managing a workforce here, you’ve likely heard about the major overhaul of labour laws. The government has consolidated 29 existing statutes into four comprehensive ones — a move aimed at simplifying regulation and enhancing worker protection. In this article, we’ll unpack what those four codes are, why they matter, and then dig into the five biggest changes you should know about now.
In the next few minutes you’ll get a clear sense of what the reform means for you — whether you’re an employee wondering if your rights will change, or an employer trying to stay compliant. We’ll start with what labour codes mean in simple terms, and then move to the practical impact.
Background: Why These Changes Now?
The situation before reform
India’s labour law framework has long been described as complex, patchy and hard to navigate. Multiple overlapping statutes, varying state-level rules and different compliances for organised and unorganised sectors created confusion. According to the Ministry of Labour & Employment’s overview, one motivation was “freedom from the web of legislation”.
What’s changed — the consolidation
The reform brings together dozens of older laws into four distinct codes: the Code on Wages, 2019, Industrial Relations Code, 2020, Code on Social Security, 2020 and Occupational Safety, Health and Working Conditions Code, 2020. While the exact number of laws merged depends on the calculation (some sources say 29, others say up to 44) the intent is clear: simplify, standardise and modernise.
Implementation status and why it matters
Although the codes were passed over 2019-2020, states need to notify rules and compliance regimes to make them fully operational. The reform is significant because labour is partly a state subject; this means implementation may vary by state.
As a worker, you’ll want to know how it affects your wage, job letter, safety and social security. As an employer, you’ll want to check your HR policies, contracts, wage definitions and compliance filings.
Overview of the Four Labour Codes
Here’s a brief snapshot of each of the four codes, to set the stage for the changes.
Code on Wages
This code brings together wage-related laws including minimum wages, timely payment, bonus and equal remuneration. It expands coverage to more workers and ensures wage definitions are standardised.
Industrial Relations Code
It covers trade unions, employment conditions, dispute resolution and the framework for industrial relations. It simplifies registration of unions and sets out clearer rules for strikes, layoffs and retrenchment.
Code on Social Security
This code extends social security benefits to workers across sectors, including those in the unorganised sector and gig economy. It creates a unified framework for pension, gratuity, maternity benefits, etc.
Occupational Safety, Health and Working Conditions Code (OSHWC)
This code covers safety, health, welfare, working conditions, hours, leave, and more — for a wider range of establishments than before. It mandates more protections and formalises requirements for annual health check-ups and so on.
The Five Biggest Changes You Must Know
The real impact of the new labour framework becomes clear when you look at the five major shifts that cut across wages, social security, worker protection and employer obligations. These are the areas that will matter most for day-to-day practice.
1. Universal Floor Wage
What the old system looked like
Minimum wages in India were set differently by each state and often varied across industries. There was no nationally defined baseline. This created confusion for both employers and employees, especially for organisations operating across multiple states.
What the new code introduces
The Code on Wages brings in a national floor wage. States cannot set minimum wages below this floor. The aim is to reduce inequality and bring consistency. According to the Ministry of Labour’s draft framework available on the Labour Ministry portal, the national floor will be revised periodically using a scientific formula based on household consumption standards.
The change means that employers who operate in states with lower minimum wage structures may need to revise wages upward once the national floor is formally notified.
Why this matters
Workers gain a guaranteed baseline pay across the country. Employers get a clearer, more predictable system to work with. For national and multi-state companies, it reduces compliance risk and brings wage definitions under one umbrella.
2. Gig and Platform Workers Come Under Social Security
The earlier gap
India’s social security laws did not cover gig workers, platform workers or much of the unorganised workforce. This left millions outside formal protections like provident fund, insurance, maternity benefits or old-age support.
What the new system offers
The Code on Social Security creates a framework where gig workers and platform workers can be registered and receive benefits through dedicated schemes. It also sets out a role for aggregators in funding certain contributions. Details on scheme design appear in draft rules shared through the central government’s labour platform and are being evolving through consultations.
A clearer roadmap for digital and platform-based workers is already discussed in guidance offered by resources like NITI Aayog’s gig workforce study, which gives insight into how the sector is expected to grow.
Why this matters
India has one of the world’s fastest-growing gig ecosystems. This reform acknowledges new forms of work and gives millions access to social protection. Employers and aggregators get a structured contribution system that reduces uncertainty in handling benefits for flexible work arrangements.
3. Greater Flexibility for Employers Under the Industrial Relations Code
How the old rules worked
Earlier laws required companies with 100 or more workers to seek government permission before layoffs, retrenchment or closure. Fixed-term employment existed in some sectors but was not widely standardised.
How the new code changes this
The Industrial Relations Code raises the threshold to 300 workers, meaning only firms above this size must seek prior approval for such actions. It also formalises fixed-term employment, allowing employers to hire workers for a specific duration while ensuring they receive the same benefits as permanent staff during their contract period.
Current interpretations and compliance notes published on platforms like ADP India provide practical guidance for HR teams preparing for changes in contract structures.
Why this matters
Workers on fixed-term contracts are now legally assured of equal benefits. Employers gain more flexibility in managing workforce needs, especially in seasonal or project-based industries. The threshold change brings clarity for mid-sized companies and reduces administrative friction.
Quick Comparison Table: Old Rules vs New Structure
This table summarises the direction of the changes.
| Change Area | Old Regime | New Labour Codes |
|---|---|---|
| Minimum wage | State-wise variations, no national baseline | National floor wage applied across states |
| Gig workers | Not covered | Included under social security schemes |
| Layoff approval threshold | 100 workers | 300 workers |
| Fixed-term jobs | Limited, uneven use | Formalised with equal benefits |
| Worker coverage | Fragmented | Broader definition and national consistency |
4. Stronger Safety Standards and Working Conditions
Where things stood earlier
Safety and working-condition rules were spread across multiple laws such as the Factories Act, Contract Labour Act and various sector-specific regulations. Coverage often depended on the size or type of establishment. Many workers, especially in smaller units, had limited protection.
What the new code changes
The Occupational Safety, Health and Working Conditions Code expands coverage to more types of establishments and brings them under one uniform framework. It introduces clearer standards for working hours, leave, welfare facilities and mandatory health check-ups for certain job categories. The code also increases accountability for contractors, which is important for industries that rely heavily on contract labour.
Guidance notes and implementation updates shared through platforms like India Briefing highlight how the safety requirements bring India closer to global norms. Resources on International Labour Organization also help explain the broader direction these reforms align with, especially around worker welfare.
Why this matters
Employers will need to invest more in safety, documentation and periodic assessments. Workers benefit from clearer entitlements, structured safety standards and better oversight.
5. Simplification, Digital Compliance and National Portability
How the previous system worked
Earlier, employers dealt with multiple registrations, returns and licences across different laws. Many filings required physical submission or varying state formats. Worker records were often fragmented, making portability difficult when people changed jobs or states.
What the new code introduces
The reform pushes for a unified compliance system. Employers will eventually migrate to single-window registration and common returns for activities covered across the four codes. The OSHWC Code, for example, moves towards a single licence for contractors valid across states. The Social Security Code also lays the foundation for digital records and portable benefits that follow workers across employers or states.
Platforms such as EPFO’s unified portal and the e-Shram database show how worker identification and benefits are being centralised. This shift is expected to strengthen national portability over time.
Why this matters
For employees, this means smoother transfers of PF accounts, easier verification and more secure access to benefits. For employers, digital filings reduce compliance duplication and simplify audits. Over time, having one worker record across systems should reduce disputes and mismatches in payroll or social security contributions.
How These Changes Shape Daily Practice
These five changes represent a major shift in how India defines wages, protects workers and manages compliance. They touch nearly every part of the employment lifecycle — hiring, payment, contracts, benefits, safety and separation.
The combined effect is a more unified and predictable structure. Workers gain stronger rights and more stability. Employers get clearer rules, especially around wage definitions, fixed-term jobs and digital compliance. The codes also create a foundation for future reforms as India’s labour market continues to evolve.
Impact on Different Stakeholders
Impact on workers
Workers gain more clarity on wages, entitlements and safety requirements. The introduction of a national floor wage and stricter working-condition rules benefits those in lower-paying or high-risk sectors. Gig and platform workers also step into a formal protection system that did not previously exist.
Impact on employers and HR teams
Employers will need to revisit wage structures, contract formats, onboarding documents and safety protocols. Many will update payroll systems to reflect the new definition of wages. HR teams should prepare for digital compliance, unified monthly filings and state-specific rule notifications.
Impact on gig economy and platforms
With dedicated schemes under the Social Security Code, platforms in mobility, delivery, home services and freelancing will need to contribute to social security funds. This increases responsibility but also brings legitimacy to a rapidly growing labour segment.
What This Means for Different Stakeholders
The labour codes are designed to simplify the system, but the changes affect each group differently. Understanding these differences helps workers, employers and platforms prepare for what comes next.
Impact on Workers
More predictable wages
With a universal floor wage forming the baseline, workers across smaller towns and low-wage sectors can expect more consistency. As states update their notifications, wages will need to align with the national standard once it is officially in force.
Better safety and welfare
The expanded coverage of the OSHWC Code strengthens protections for workers in manufacturing, construction, logistics, mining and other labour-intensive sectors. Mandatory facilities, health check-ups and clearer working-hour rules help reduce workplace risks.
Stronger documentation
The codes push for written employment letters, digital records and single worker identification. Workers now have better visibility into their entitlements, which also reduces disputes.
Impact on Employers and HR Departments
Alignment of wage components
The new definition of “wages” under the Code on Wages affects basic pay, allowances and contributions. Many employers will need to review salary structures to avoid non-compliance, especially around PF and gratuity calculations. For understanding patterns in wage classification, HR teams often refer to payroll frameworks shared on platforms like in.adp.com.
Workforce planning flexibility
The Industrial Relations Code’s higher threshold for layoff approval gives mid-sized companies more room to reorganise teams. Fixed-term employment can now be used for project-based roles with clearer rules.
Streamlined filings
Digital compliance, one-time registrations and unified returns reduce administrative repetition. Employers who previously juggled several filings each month will transition to a more consolidated format. Portals like the Shram Suvidha system demonstrate how filings are being centralised.
Impact on Gig Workers and Platform Companies
Access to structured protection
Gig and platform workers will come under social security plans once final schemes are notified. Benefits like accidental insurance, old-age support or maternity cover can significantly improve financial stability for flexible workers.
Shared responsibility
Aggregators in mobility, food delivery, e-commerce, home services and freelancing will need to contribute to social security funds. The goal is to balance flexibility with protection.
Practical Steps for Employers
Audit wage and contract structures
Start by evaluating salary components and contract templates. Ensure every employee receives a written employment letter that meets the requirements under the new codes.
Revisit safety and welfare obligations
Assess your current compliance with safety norms, welfare facilities, leave structures and record-keeping. The updated OSHWC Code applies to more categories of establishments, so even smaller units may need new measures.
Prepare for digital compliance
As filings become unified and records move online, employers should standardise their documentation and maintain updated worker information. Using a single worker ID across PF, ESI and internal systems will become important.
Practical Steps for Workers
Know your entitlements
Workers should review their appointment letters, wage slips and PF details. Minimum wage notifications, working-hour rules and safety standards will gradually shift toward the structure defined under the labour codes.
Track your social security
Gig and platform workers should ensure they are registered under national databases like e-Shram and keep personal details updated. This will help them access benefits once schemes under the Social Security Code roll out.
Employer and Worker Checklist
This comparison helps both sides stay aligned as the labour codes are implemented.
| Area | What Employers Should Do | What Workers Should Do |
|---|---|---|
| Wage structure | Review salary components and ensure compliance | Check wage slip, PF deductions and floor wage updates |
| Contracts | Issue standardised appointment letters | Save copies of all employment documents |
| Safety standards | Update workplace safety processes | Understand your rights on leave and safety |
| Social security | Update PF, ESI and gig worker contributions | Register on national worker databases |
| Compliance | Move to digital filings | Keep identification details consistent |
Key Takeaways and Next Steps
The shift to four labour codes marks one of India’s most significant employment reforms. It streamlines compliance, expands worker protection and offers a clearer, more predictable structure for both employees and employers. As implementation progresses across states, the focus will be on standardising wages, improving safety, widening social security and reducing administrative complexity.
Workers should stay informed about wage updates, social security schemes and workplace rights. Employers should review internal processes, wage formulas, contract templates and safety measures to align with the emerging framework.
Conclusion
India’s new labour codes aim to bridge long-standing gaps in wage protection, safety standards and social security. They bring nearly every sector—formal, informal and digital—under a consistent structure. While full implementation will take time, the direction is clear: simpler laws, wider coverage and more predictable rules.
If you want to stay updated as state notifications roll out, consider subscribing to trusted policy platforms or downloading a compliance checklist to help track the changes. Staying informed now ensures smoother transitions for both workers and organisations as the new framework becomes part of everyday practice.
FAQ
What are the four labour codes in India?
The four labour codes are the Code on Wages, Industrial Relations Code, Code on Social Security and the Occupational Safety, Health and Working Conditions Code.
How do the new labour codes affect my salary?
Your salary may change once the national floor wage is notified. If your state’s wages are below the new floor, they will need to be revised upward.
Are gig workers covered under the new labour codes?
Yes. Gig and platform workers will receive social security benefits under dedicated schemes once final rules are issued by the government.
Do employers need to change their contracts?
Employers should review wage definitions, contract terms, appointment letters and safety compliance to align with the new framework.
Has every state implemented the labour codes?
Not yet. Each state must publish its own set of rules. Implementation will vary until all states complete their notifications.
Will working hours and leave policies change?
Yes. The OSHWC Code brings updated rules for working hours, rest intervals, leave and workplace facilities across many sectors.
What should workers do to prepare?
Workers should keep appointment letters, wage slips and social security details updated, and register on national portals like e-Shram.
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