India’s employment landscape entered a new phase today as the Centre brought the four consolidated labour codes into effect, replacing 29 older laws.
Considered the most significant modernisation of labour regulations since Independence, the overhaul reshapes rules around wages, benefits, and workplace protections.
The reform comes at a pivotal time. Over the past six years, India has added more than 16 crore jobs, unemployment has fallen to 3.2%, and female participation in formal work has risen sharply. Yet, the legal framework governing this expanding workforce had remained largely unchanged for decades.
The new codes – covering wages, industrial relations, social security, and occupational safety – aim to simplify this system by replacing outdated and overlapping rules with a unified structure.
One of the most immediate changes is the adoption of a uniform definition of “wages” across all labour laws. This is expected to influence salary structures and benefit calculations. Fixed-term employees will now qualify for gratuity after just one year of service – an important update for sectors that rely on contract-based work.
For the first time, gig and platform workers – drivers, delivery personnel, freelance service providers, and others in the digital economy – are formally recognised under labour law.
Aggregator platforms will be required to contribute to a new social-security fund supporting insurance, health coverage, disability benefits, and old-age protections. A national database for unorganised workers will also be introduced, making benefits portable and enabling better mapping of skills and employment histories.
The codes expand women’s access to jobs by allowing night shifts across industries such as manufacturing, logistics, and mining, provided consent and safety measures are ensured. Uniform safety rules now replace the varied standards previously applied to sectors like plantations, textiles, beedi-making, and dock work. Employees aged 40 and above will be eligible for a free annual health check-up, signalling a move toward consistent occupational health norms.
For businesses, compliance will become significantly simpler. Multiple registrations, licences, and returns will be replaced with single-registration and single-return systems. Inspections will move online and become risk-based, shifting the focus from punitive actions to facilitation.
The Industrial Relations Code clarifies rules on union recognition, permits work-from-home arrangements in certain services, and introduces two-member tribunals to expedite dispute resolution. Retrenched workers will receive 15 days of wages from a new reskilling fund to support job transitions.
Overall, the four labour codes mark a shift toward a more predictable and protective labour environment. They extend social security to millions of previously uncovered workers, bring fixed-term staff closer to parity with permanent employees, and reduce compliance burdens for businesses.