New Labour Laws: On November 21, 2025, India launched four new labor codes to modernize work laws, benefiting workers and employers differently across sectors.
Factory Floor: Enhanced Worker Protections and Formalization
Manufacturing and unorganized sector workers stand to gain the most, as the new codes extend core labor rights to millions of previously unprotected informal workers.
1. Universal Minimum Wages and Timely Pay
For the first time, all workers are legally entitled to a minimum wage with timely payments, ensuring fair compensation for everyone.
2. Expanded Social Security
Coverage for Provident Fund , Employees’ State Insurance , and other benefits now extends to all workers, including gig and platform workers who were previously excluded.
3. Improved Safety and Health
The Occupational Safety, Health, and Working Conditions Code mandates higher safety standards, free annual health check-ups for workers above 40, and safety committees in larger establishments.
4. Formal Employment Records
Employers must now issue appointment letters, bringing millions of informal workers into the formal system. This ensures clear terms of employment, wages, and social security entitlements.
5. Equal Opportunity for Women
Women can now work night shifts and in all types of occupations, including underground mining and heavy machinery, provided safety measures are in place and their consent is ensured.
Corporate Towers: Increased Flexibility and Ease of Doing Business
For employers, particularly in corporate offices and MSMEs, the new codes offer operational flexibility and a simplified regulatory framework.
Simplified Compliance
Merging 29 laws into four codes simplifies compliance, giving companies one registration, one license, and one annual return, reducing filings and inspections.
Workforce Flexibility
Fixed-Term Employment lets companies hire short-term workers with full benefits, including pro-rata gratuity, reducing reliance on contract labor.
Higher Thresholds for Layoffs
The threshold for seeking government approval for layoffs has increased from 100 to 300 workers, giving larger companies more flexibility in managing their workforce during economic fluctuations.
Predictable Work Environment
Clearer rules for strikes and lockouts, including a mandatory 14-day notice period, aim to reduce industrial disruptions and create a stable work environment.
The Balance of Power
Formal-sector employees may have slightly lower take-home pay but gain stronger social security, while unorganized and gig workers gain social protection for the first time.
