Biggest Labour Reforms In Independent India
New Labour Code for India 2025: Biggest Labour Reforms In Independent India
The Indian parliament has finally passed the most-awaited labour law reforms of 2025, effective from November 22, 2025. The new reforms will help protect the basic rights of hard-working workers in our country and support economic growth. They also show the idea of having less government interference but better and faster governance. The new Labour Codes ensure every worker receives a minimum wage and is paid on time. They also focus robustly on keeping workers safe at their workplace.
These reforms will provide workers with a better, safer, and more enhanced environment to work in, which will contribute to the country’s economic growth. These new labour laws of 2025 will facilitate doing business in india and will reduce the compliance process, red-tapism and ‘inspector raj’.
The government of india has combined a total of 29 existing labour laws into four simplified labour codes: the Wages Code 2019, the Industrial Relations Code 2020, the Occupational Safety, Health and Working Conditions (OSH) Code 2020, and the Social Security Code 2020.
Changes in Definition of ‘Wages’:
A big change in the new labour rules is the new standard definition of “wages”. Your basic salary must now be at least 50% of your total pay. Because of this, some employees may get a little less take-home salary for now, since more money will go into PF and gratuity. But in the long run, this is good because it increases your retirement savings, strengthens social security benefits, and gives you better financial security for the future.
Social Security for Gig Workers:
It is the first time in indian history that some relief has been given to gig workers like delivery partners, ride-hailing drivers, and freelance service providers, who will benefit from this change. A Social Security fund to be created for 40 crore unorganised workers, including the gig and platform workers. This would help in extending comprehensive social security coverage.
Gratuity Eligibility Period Reduced to One Year
The new labour codes of 2025 have reduced the gratuity eligibility period from five years to just one year. The requirement of minimum service has been removed for payment of gratuity in the case of fixed-term employees. Fixed-term employees, workers hired on time-bound contracts commonly seen in IT, manufacturing, media, logistics and services, etc., were earlier required to complete five years of service in order to be qualified. Now, the good news is that this period has been reduced from five to just one year.
Appointment Letter is Now Made Compulsory
It is being made mandatory for employers to provide a formal appointment letter to their employees at the time of their joining. This document clearly defines workers’ wages and job roles and also protects their rights to social security benefits. For millions of informal workers who usually work without proper documents, this is a major step toward getting more job security and stability.
Double Wage Rate in Case of Overtime Work
If workers are doing overtime, then, as per the new labour codes of 2025, they should be paid double wages. Employers have been mandated to issue appointment letters to every employee, including workers from unorganised sectors, gig roles, and short-term jobs. Now, if an employee has worked for 180 days a year, then he/she is entitled to one day of leave for every 20 days of work done. Earlier, the working limit was for 240 days. This shorter requirement helps individuals who work in seasonal jobs or jobs with changing shifts, because previously they could not qualify due to the longer time needed.
Gender Discrimination is Prohibited at the Workplace
The new labour codes 2025 have been formulated in the interest of gender equality. According to the codes, women are now allowed to work night shift across all sectors. Employers have been directed to provide safe transport and clean facilities for all employees working under them. Also, I have been instructed to maintain a proper system to handle complaints.
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