New Labour Code 2025 has brought a landmark shift in the Labour framework of India, incorporating the fragmented 29 Labour acts in India into four comprehensive and simplified codes. This is expected to bring more transparency, uniformity, and digital modernization into the Labour ecosystem for better compliance on the part of the employers, along with greater protection and social security for workers.
While the reform process actually began with the Code on Wages notified on 8 August 2019, it was followed by three more codes published on 29 September 2020: The Industrial Relations Code, the Social Security Code, and the Occupational Safety, Health and Working Conditions Code. Central provisions went technically live on 21 November 2025, since actual implementation required state-specific rules and marked the operational commencement of the new single-window Labour regime. Further provisions will be rolled out in due course as the states finalize their rule-making.
These four codes related to wages, industrial relations, social security, and occupational safety and health and working conditions would reshape the Labour policy in India by bringing uniformity in definitions, digitization of compliance requirements, and transparency in inspections, with contemporary workplaces brought under updated Labour governance. The transformation therefore ushers in a big shift toward simplified, technology-driven, and business-friendly Labour legislation for the country.
Why the New Labour Codes Were Necessary
Before the reforms, every employer operating in India had to work in accordance with many Labour acts, each having separate authorities, separate registrations, separate due dates, and separate procedural compliances. Such multiplicity of laws caused problems like:
- Inconsistent definitions of wages, workers, and establishments
- Complex paperwork and manual audits
- Overlapping registrations and licensing requirements
- Out-of-date statutory provisions that failed to support the new emerging models of employment
- Compliance risk arising from interpretational differences
The result has been disorganized Labour laws in HR that mostly confuse policies, payroll, compliance calendars, and safety standards. From an employee's perspective, such protections tended to be fragmented, allowing gaping holes in the terms of social security coverage, wage enforcement, and even safety at work.
These new codes integrate all major aspects of employment under four uniform verticals with consistency and transparency in order to secure the welfare of workers. The revised framework has also become more attuned to modern industrial operations, digital platforms, gig work arrangements, and flexible forms of employment.
Understanding the four new Labour codes
The Labour codes in India are divided into four pillars:
1. Code on Wages, 2019
It consolidates the Minimum Wages Act, the Payment of Wages Act, the Payment of Bonus Act, and the Equal Remuneration Act. Major reforms in the code include:
- Universal minimum wage for all employees
- Introduction of a national floor wage
- Strict application of the rule on 50% wage definition
- Non-discriminatory pay practices
- Overtime at twice the normal wage rate
- Reduction of imprisonment provisions and the introduction of compounding of offenses
- Guidance-based enforcement through an inspector-cum-facilitator model
PF, gratuity, bonus, and many cost components would be affected by the redefined wage, and hence this is one of the provisions in the new Labour legislation that most affects the employers.
2. Industrial Relations Code, 2020
The Code consolidates all major industrial laws that deal with disputes, trade unions, and conditions of employment. Key reforms include:
- Introduction of Fixed-Term Employment with gratuity after one year
- Negotiation on the union structure for effective collective bargaining
- A reskilling fund for laid-off employees
- For layoff/closure approvals, the threshold was raised from 100 to 300 workers.
- Digital dispute resolution and faster access to tribunal
- Compulsory strike and lockout notice period
- Work-from-home provision acknowledged
The Code modernized the relationship between employer and employee, and also encouraged the prevention of disputes.
3. Code on Social Security, 2020
It consolidates nine major social security legislations, including EPF, ESIC, and the Maternity Benefit Act. Salient features of the Code are:
- ESIC coverage extended across India
- E.P.F enquiry time limits introduced
- Social security for gig and platform workers
- Accident During Commuting Considered Employment Injury
- Mandatory digital registers and filings
- Eligibility for gratuity in case of fixed-term employees
- Definition of universal wages applicable to benefit calculation
This is a big addition to the Labour policy in India, extending social security to new-age sectors of employment.
4. Occupational Safety, Health and Working Conditions (OSHWC) Code, 2020
The Code integrates 13 older laws relating to safety and working conditions. Major reforms include the following:
- One registration, one licence, one return system
- Free annual health check-ups are to be provided in the notified categories.
- 8-hour workday and 48-hour work week
- Protection of women in night shifts with adequate safeguards
- Wider coverage of migrant workers
- Compulsory safety committees in large establishments
- Digitized Inspections: An Algorithm-based Risk Assessment-led Approach
The immediate consequence for manufacturing, construction, logistics, and services will be huge.
Old vs. New: How the Codes Transform Compliance
The old Labour laws had many licenses and complicated definitions; since there are physical inspections involved in the compliance, it was very time-consuming and unpredictable. To simplify this, the new Code 'Labour code 2025' has brought in the following:
- Standardized definition of all codes
- A single digital portal for filings
- One licence and one return system
- Algorithm-based checks
- Faster dispute resolution
- Digitization of social security registration
- Simplified Norms for Contract Labour
- Formalization of gig and platform workers
The other major feature of the new codes is that while the applicability of the Codes is from 21 November 2025, the states are required to notify their respective rules for full implementation. It is only after such notification of the rules that some provisions of the old laws may remain applicable. This makes the whole process very important for industries because such monitoring is required at the center and state levels.
What does New Labour Code cover?
The New Labour Code 2025 is a pathbreaking reform in Labour laws in India, ushering in one unified, modern, and inclusive code for all categories of workers and establishments in the country. For the first time in India, Labour laws would comprehensively cover traditional employees, contract and temporary workers, gig, and platform workers, truly reflecting the change in the nature of work. This will protect migrant laborers, journalists, and workers in various sectors while providing decent wages, social security, and safe working conditions.
Key Coverage Areas:
- Extensive worker coverage: Involves permanent employees, contract and temporary workers, gig platform workers, migrant labors, and journalists.
- Sector Coverage: It also includes construction, manufacturing, IT/ITES, MSMEs, and as a matter of fact, all organized and unorganized establishments.
- Wages & Benefits: This includes minimum wages, overtime, leave entitlements, gratuity, PF and other statutory benefits.
- Working Hours & Safety: This Code standardizes working hours, introduces an overtime policy, and improves the provision of occupational health and safety.
- Industrial Relations: It helps in the process of settling disputes, union recognition, and effective communication between employers and employees.
- Social Security: This covers insurance, provident fund, and other benefits for gig workers, platform workers, and migrant workers.
- Compliance and transparency: Introduce digital record-keeping, a unified registration system, and simplified reporting by employers.
- Inclusion and modernization: It put all categories of workers under one legal, comprehensive framework representative of today's realities of the workforce.
Industry Implications: What Organizations Must Do Now
The industries will immediately have to take action regarding compliance with the new Labour code 2025.
1. Restructure the components of wages.
- Apply the rule of 50 percent on the computation of wages.
- Change in PF, gratuity, overtime, and other statutory benefits
- Review projections of cost of employees
2. Review and update all HR policies and employment documents
- Re-draft of the HR manual
- Review and Update All Leave Policies, Disciplinary Policies, and Working Hour Rules
- Providing updated appointment letters, when necessary, to OSHWC
3. Review practices involving contract labor
- Meet new licensing thresholds
- Align responsibilities between contractors and principal employers
4. Improve Social Security Coverage
- EPF and ESIC eligibility Review
- Register gig/platform workers, where applicable
- Ensure that the registers are digitally submitted.
5. Get Ready for Digital Inspections
- Keep records digitally
- Prepare for risk-based inspections
- Adopt digital registers and e-returns.
6. Perform Impact Analysis
- Manpower Cost Impact Assessment
- Doing financial modeling
- Risk and compliance gap analysis
Industry Impact: New Labour Code 2025
New Labour Code 2025 ushers in major operational and financial reforms for the industries. Due to the redefinition of wages, the cost for the employer would go up for increasing PF, ESIC, gratuity, and overtime payments. Work hours are uniform, and companies would be compelled to reshape work patterns with compulsory double overtime, especially in manufacturing, logistics, and the service sectors.
Key Changes to Compliance:
- Contract Labour: The principal employers now bear more responsibility regarding statutory benefits and safety compliance.
- Employment Formalization: Formalization of employment was supposed to be done through appointment letters, maintaining electronic records, and using single unified registration systems.
- Social Security Expansion: Gig and platform workers are covered; aggregators have increased contribution obligations.
Apart from this, the workplace safety under the OSH Code requires more investment in health and risk management and protective measures, particularly for hazardous industries. The industrial relation framework is better organized with clear rules on union recognition, notice conditions, and faster dispute resolution.
Other Impacts
- Fixed-term employment offers hiring flexibility along with full statutory benefits.
- While the cost of compliance and manpower has increased, industries will benefit from it by way of simplification of processes, digital inspections, reduced litigation, and a transparent regulatory environment.
How SKMC Global Helps Organisations in Labour Code Compliance
The special services provided by SKMC Global to the organizations for compliance with the new Labour code 2025 facilitate an easy transition of all concerned into this changed regulatory regime. Our support encompasses the whole domain of compliance under Labour laws and includes but is not restricted to the following:
- Comprehensive Labour Code Impact Assessments to Identifying organizational gaps and compliance requirements
- Redrafting of HR Policies and Employee Handbooks in line with new codes.
- Payroll Structure Recalibration: Based on reviewed wage definition and statutory obligations.
- Implement end-to-end compliance with all applicable Labour laws. Assist with digital registrations, licenses, and returns to ensure timely statutory filings. State-wise rule tracking and alerts: Keep organizations updated about local notifications.
- Training for the HR Teams and Management on new compliance procedures and best practices.
- Industrial Relations Advisory: The real challenge is managing disputes, unions, and workforce relations in the organization.
However, such organizations, with professional guidance from SKMC Global, can ensure full compliance, exclude legal and operational risks, and smoothly relocate to a modernized framework in respect of labour legislation.
Conclusion
A new Labour Code 2025, indeed, marks a very important time for the employment landscape in India. It has also simplified compliance, renewed the regulations, and given more protection to workers than ever before by consolidating 29 separate Labour acts in India into four streamlined Labour Codes. Thus, since the effective date of the new Labour code implementation date effective from 21 November 2025, it is high time that businesses started revisiting their wage structures, HR policies, safety systems, and compliance frameworks.
These reforms introduce a transparent, consistent, and growth-oriented regulatory environment in the interest of both employers and employees. As India is on its transition towards an organized and technology-enabled workforce ecosystem, it is a fact that the sooner an organization adopts these changes, the bigger the long-term advantages will be. With expert assistance from SKMC Global, every organization can switch over seamlessly and be compliant under the new Labour code in India, hence assuring a future-ready and legally sound employment framework.