Centre’s Four Labour Codes Explained

kiran
Uncategorized
November 23, 2025
Centre's Four Labour Codes Explained


The Ministry of Labour and Employment said the landmark transition will “modernise India’s labour market, expand worker protections, simplify regulations for businesses, and align the country’s labour ecosystem with the needs of a rapidly evolving economy.”

Calling the implementation “historic”, the government said the move lays a “powerful foundation for a future-ready workforce supporting resilient, globally competitive industries”, as India positions itself as a manufacturing and services hub under Aatmanirbhar Bharat.

Why Reforms Were Needed: Legacy Laws from a Bygone Era

Many labour laws in India were originally framed between the 1930s and 1950s — decades before the emergence of digital work, flexible employment, gig economies, supply-chain-driven industries and globalised competition. As the economy expanded and diversified, the laws became:

  • Fragmented, with overlapping definitions and conflicting requirements

  • Complex, requiring multiple registrations, licences and returns

  • Outdated, failing to address contract labour, gig work, platform-driven jobs

  • Restrictive, limiting flexibility for enterprises

  • Insufficient, leaving gig workers, women workers, migrants and youth under-protected

The four Labour Codes aim to consolidate and harmonise the regulatory framework while ensuring that workers’ rights remain at the centre of labour governance.

What Changes for Workers and Employers: A Before–After Snapshot

Key Transformations Under the Labour Codes:

1. Formalisation of Employment

Earlier: Appointment letters not mandatory; informal hiring widespread.
Now: All workers must receive a written appointment letter, ensuring proof of employment, transparency and legal protection.

2. Universal Social Security

Earlier: Gig, platform and unorganised workers mostly outside social security.
Now: All workers — including gig, platform and migrant workers — will get PF, ESIC, insurance and other benefits.

3. Minimum Wages for All

Earlier: Minimum wages applied only to scheduled industries, leaving many uncovered.
Now: Every worker has a statutory right to minimum wages and timely payment.

4. Free Annual Health Check-ups

Mandatory for all workers above 40, promoting a preventive healthcare culture across sectors.

5. Women’s Workforce Participation

Women can now work night shifts in all sectors — including mining, manufacturing and hazardous industries — with their consent and safety provisions. Equal pay is legally enforced.

6. ESIC Coverage Expanded Nationwide

Establishments with even one worker in hazardous processes brought under mandatory ESIC coverage.

7. Compliance Simplified

Multiple registrations and licences consolidated into:

  • Single registration

  • PAN-India single licence

  • Single annual return

Sector-Wise Impact: Who Benefits and How
1. Fixed-Term Employees

  • Same wages and benefits as permanent staff

  • Gratuity eligibility after one year

  • Boosts direct hiring, reduces contractualisation

2. Gig & Platform Workers

  • Gig and platform work legally defined for the first time

  • Aggregators to contribute to worker welfare funds

  • Aadhaar-linked Universal Account Numbers ensure portability across states

3. Contract Workers

  • Guaranteed social security and medical coverage

  • Employer responsible for health and safety

  • Annual health check-ups mandatory

4. Women Workers

  • Equal pay and non-discrimination fully codified

  • Safe night-shift opportunities expand earning potential

  • Mandatory internal grievance committees

  • Parents-in-law included in family definition for female workers

5. Youth Workers

  • Guaranteed minimum wages

  • Mandatory appointment letters

  • Payment during leave made compulsory

  • Floor wage ensures a minimum living standard

6. MSME Workers

  • Covered under Social Security Code regardless of size

  • Better working conditions: canteens, drinking water, rest rooms

  • Double overtime pay and paid leave ensured

7. Beedi & Cigar Workers

  • Minimum wages extended to all

  • Working hours capped

  • Double wages for overtime

  • Bonus eligibility after 30 days’ work

8. Plantation Workers

  • Mandatory safety equipment

  • ESIC coverage for workers and families

  • Education facilities for children guaranteed

  • Codes apply to plantations with 10+ workers or ≥5 hectares

9. Audio-Visual & Digital Media Workers

  • Journalists, video editors, stunt artists get full benefits

  • Mandatory appointment letters

  • Overtime paid at double rate

10. Mine Workers

  • Certain commuting accidents treated as employment-related

  • Uniform national safety standards

  • Free annual health check-ups

  • Working hours capped at 8–12 per day

11. Hazardous Industry Workers

  • Mandatory health check-ups

  • Women allowed in all hazardous jobs with safety measures

  • On-site safety committees compulsory

12. Textile Workers

  • Equal wages for migrant workers

  • Claims window extended to three years

  • Double wages for overtime

13. IT & ITES Workers

  • Salary must be paid by the 7th of every month

  • Equal pay reinforced

  • Women may work night shifts

  • Better resolution mechanisms for harassment and wage disputes

14. Dock Workers

  • All dock workers receive formal legal recognition

  • PF, pension and insurance ensured

  • Mandatory medical facilities at worksites

  • Annual health check-ups funded by employer

15. Export Sector Workers

  • Fixed-term workers receive PF, gratuity and social security

  • Annual leave eligibility after 180 days

  • Mandatory consent and safety for night-shift women employees

Structural Changes: Transforming Labour Governance

  • National Floor Wage to ensure no worker receives sub-minimum wages

  • Gender-neutral opportunities, prohibiting discrimination including against transgender persons

  • Inspector-cum-Facilitator system to support compliance rather than penalise

  • Faster dispute resolution through two-member Industrial Tribunals

  • National OSH Board to set uniform safety standards

  • Mandatory safety committees in establishments with 500+ workers

  • Higher threshold for factory applicability, easing burden on smaller units

Transition Plan and Public Consultations

The government will hold nationwide stakeholder consultations while framing rules under the four Codes. During the transition phase, provisions of the existing labour laws will continue until replaced by new rules, schemes and notifications under the Codes.

India’s Social Security Expansion: A Decade of Progress

Government data shows social security coverage has risen from 19% of the workforce in 2015 to over 64% in 2025, driven by schemes such as EPFO expansion, ESIC enrolment, PM-SYM, Aadhaar-linked portability and digital compliance systems.

Officials said the implementation of the four Codes marks “the next major leap” in strengthening India’s labour governance, making benefits portable nationwide and ensuring that women, youth, gig workers and migrant workers are fully integrated into the formal labour ecosystem.

A Transformational Shift for India’s Workforce

With expanded protections, simplified compliance, and modern regulatory frameworks, the Labour Codes are expected to:

  • Boost employment generation

  • Strengthen India’s competitiveness in global supply chains

  • Enhance women’s workforce participation

  • Reduce informality

  • Support MSMEs and startups

  • Improve working conditions and social protection

  • Enable flexible work arrangements for the digital economy

The government described the move as a “pro-worker, pro-women, pro-youth and pro-employment milestone”, signalling a new era in India’s labour governance aligned with international best practices.



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