India is on the brink of a major transformation in its labour regulation landscape. The government has introduced four comprehensive labour codes that aim to simplify and modernize the country’s outdated labour laws that is India labour code. These are:
- The Code on Wages, 2019
- The Industrial Relations Code, 2020
- The Social Security Code, 2020
- The Occupational Safety, Health and Working Conditions (OSHWC) Code, 2020
Together, they replace 29 existing central labour laws, ushering in a unified framework to improve ease of doing business and extend greater social security and workplace safety across sectors.
What’s Changing with the Indian labour code?
- Standard Definition of Wages
The new wage definition will streamline calculations for PF, ESI, bonuses, and gratuity, ensuring consistency across laws and boosting long-term employee benefits. - Coverage for Gig and Platform Workers
Gig economy workers, such as food delivery agents and ride-hailing drivers, are now entitled to social security benefits, funded by contributions from digital platforms. - Flexible Industrial Relations
The threshold for prior government approval for retrenchment or closure increases from 100 to 300 employees, giving companies more flexibility in workforce decisions. - Enhanced Workplace Safety
Stricter standards for health, safety, and working conditions will apply, especially in factories, mines, and construction sites. Licensing will shift to a single-window digital system. - Revised Working Hours
The codes permit up to 48 working hours per week, with provisions for four-day work weeks if states approve.
Implementation Status: Where Do Things Stand?
Despite being passed by Parliament, the central government has not yet issued a final date for pan-India implementation.
However, as of July 2025:
- 34 states and union territories have drafted or notified rules under one or more codes.
- Gujarat has officially notified rules under the Occupational Safety Code.
- A phased rollout is expected, starting possibly from August 1, 2025, beginning with large enterprises and gradually covering small and medium businesses.
States must complete rule-making for the codes to take effect. Once notified by the central government, the new regime will replace the existing fragmented structure.
Challenges & Resistance of the new labour law in India
While the business community generally supports the reforms for reducing red tape and improving compliance processes, trade unions have expressed strong opposition:
- Nationwide strikes were held on July 9–10, 2025, demanding:
- A minimum wage of ₹26,000
- Equal pay for women
- Rollback of provisions allowing easier layoffs and diluted union rights
- End to excessive contractualization of labour
Labour groups argue that the reforms favor employers and undermine collective bargaining and job security.
What Employers Should Do Now
To prepare for the implementation of the new codes, businesses must take proactive steps:
- Update HR and Payroll Policies
Align wage definitions and benefits calculations with the new standards. - Review Employment Contracts
Make changes to reflect fixed-term contracts, termination processes, and working hours. - Upgrade Compliance Systems
Prepare for single-window registrations, longer license validity, and streamlined audits. - Incorporate Gig Worker Policies
If your business relies on gig workers, ensure processes are in place for mandatory social security contributions. - Engage with Legal Advisors
Seek expert guidance on adapting your employment practices and avoiding penalties.
4 Labour codes in India latest notification
The new labour codes represent a monumental shift in how labour is regulated in India. With a clear focus on simplifying compliance, expanding social protection, and boosting formal employment, these reforms can benefit both employers and workers—if implemented effectively.
As we approach the anticipated rollout, organizations must stay informed, agile, and compliant to navigate this transition successfully. Early preparation will not only reduce legal risk but also improve employee trust and operational efficiency.
