Labour laws in India 2025: What HR and employees need to know

What does the new labour law mean?

On November 21, 2025, the Government of India launched a historic change in the country’s employment system by bringing in the new labour laws in India. These laws replaced 29 old and complicated acts with four simple labour codes.

The goal of these new laws is to make compliance easier, protect workers better, and modernize India’s employment system to match the needs of a fast-changing economy driven by technology, flexibility, and inclusion.

The four new labour codes are:

• Code on Wages (2019)
• Industrial Relations Code (2020)
• Social Security Code (2020)
• Occupational Safety, Health and Working Conditions (OSH) Code (2020)

Together, these laws change how jobs are regulated across both formal and informal sectors. They ensure fair pay, social protection, workplace safety, and gender equality for all types of workers from factory employees to gig economy professionals.

Why were labour reforms needed?

For many years, labour laws in India were scattered across different acts, many written as far back as the 1930s and 1950s. Those laws were made for an old industrial economy and were no longer suitable for modern jobs like those in the digital and gig sectors.

This caused confusion, too much paperwork, and unequal protection for millions of workers.

The new labour laws in India 2025 were introduced to:

• Combine 29 separate laws into four easy-to-understand codes.
• Reduce paperwork with a single registration and digital filing system.
• Ensure all workers, including those in the unorganized sector, are legally protected.
• Bring India’s employment system in line with global standards, supporting the government’s vision of Aatmanirbhar Bharat (Self-Reliant India).

Overview of the four labour codes

Code on wages, 2019

This code replaces older laws related to wages and bonuses. It:

• Guarantees minimum wages for all workers across every industry.
• Makes it mandatory for employers to pay salaries on time and follow the rule of equal pay for equal work.
• Introduces a National Floor Wage, which means no one can be paid less than a basic minimum standard across the country.

Industrial relations code, 2020

This code focuses on keeping good relationships between workers and employers. It:

• Simplifies hiring and termination processes, making it easier to do business.
• Sets up fast-track tribunals to handle disputes quickly.
• Promotes a friendly inspection system, where inspectors act more like guides than enforcers.

Social security code, 2020

This is one of the most important labour laws in HR because it protects all types of workers. It:

• Extends benefits like provident fund (PF), employee insurance (ESIC), and gratuity to everyone including gig and platform workers.
  
• Introduces a Universal Account Number (UAN) linked to Aadhaar, so benefits move with the worker even if they change jobs or cities.
  
• Makes companies like delivery or ride-hailing platforms contribute 1–2% of their revenue to welfare funds for gig workers.

Occupational safety, health and working conditions (OSH) code, 2020

This code ensures that all workplaces follow safety and health standards. It:

• Sets nationwide rules for workplace safety and hygiene.
  
• Requires employers to offer free annual health check-ups to workers aged 40 and above.
  
• Makes it compulsory for large companies (500+ employees) to form safety committees and hire safety officers.

Key changes under the new labour laws for employees and employers

The new labour laws in India 2025 benefit every type of worker. Here’s how they help different groups:

Fixed-term employees (FTE)

• Get the same benefits as permanent staff including medical cover, leave, and social security.
  
• Can now receive gratuity after just one year of service instead of five.
  
• Encourage companies to hire directly instead of using too many contract workers.

Gig and platform workers

• Gig workers (like drivers and delivery partners) are officially recognized under the law for the first time.
  
• Platforms must contribute to a worker welfare fund.
  
• Benefits are portable nationwide, so workers keep their protections even when they move.

Contract workers

• The main employer must provide healthcare and social security benefits.
  
• Workers get annual health check-ups and gratuity after one year.
  
• Contract employees now enjoy equal legal rights as permanent employees.

Women workers

• Equal pay for equal work is now a legal requirement.
  
• Women can work night shifts and in industries like mining or heavy machinery, but only with consent and safety measures.
  
• The definition of “family” now includes parents-in-law, expanding health and social coverage.

Youth workers

• Every worker must receive an appointment letter and minimum wages.
  
• Wages must continue even during paid leave.
  
• This helps promote formal jobs and protects young workers from exploitation.
  

MSME workers

• All workers in micro, small, and medium enterprises are covered under the Social Security Code.
  
• They are guaranteed minimum wages, paid overtime, and access to basic amenities like clean rest areas and canteens.
  
• Timely salary payments improve financial stability.

IT and ITES workers

• Salaries must be paid by the 7th of every month.
  
• Women can work night shifts in IT and tech companies with proper security.
  
• Disputes about wages or harassment must be resolved quickly and fairly.

Media and digital workers

• Journalists, dubbing artists, and stunt professionals now get formal job recognition.
  
• Any overtime must be voluntary and paid at twice the normal rate.
  
• Appointment letters must clearly show job roles, pay, and benefits.

How things have changed?

How the new labour laws shape India’s economy and workforce?

The new labour laws in India 2025 aim to make the job market fairer, simpler, and more transparent.

Main benefits include:

• More formal jobs: Millions of workers will now have official job records and social benefits.
• Easier business setup: Fewer forms and clear rules will attract local and foreign investors.
• Empowering women: Women can take on more roles and earn equally.
• Better social protection: Every worker gets PF, ESIC, and insurance coverage.
• Higher job satisfaction: Fair pay and safer workplaces help build trust and productivity.

Challenges and transition concerns

Even though these reforms are progressive, there are some challenges:

• State implementation: Labour is a shared responsibility between the central and state governments. Smooth coordination is essential.
• Small business readiness: MSMEs may need support to adjust to new compliance systems.
• Worker awareness: Many unorganized workers need help understanding and claiming their new rights.

For HR professionals and employers, knowing these labour laws in HR is key to staying compliant and creating fair workplaces.