Implementation of Four Labour Codes

Four Labour Codes (a) Code on Wages, (b) Industrial Relations Code, (c) Social Security Code, and (d) Occupational Safety, Health and Working Conditions Code have come into force from today, i.e. 21st November 2025. These four Codes have subsumed 29 labour laws. The main change is the subsuming of the Industrial Disputes Act 1947. Absence of disputes implies a harmonious relationship between labour and management. Therefore, every industrial relations legislation necessarily aims at providing conditions congenial to industrial peace. Almost all interruptions are due to industrial disputes. The object of all labour legislation around the world is to ensure fair wages and prevent disputes.

From now onward, it will be part of the Industrial Relations Code. Apart from the Industrial Disputes Act, the other two acts which have been subsumed within it are: the Trade Union Act and the Industrial Employment (Standing Orders). Not many changes have been made in this code from other labour acts. However, this restructuring ensures uniformity in working hours, overtime pay, and worker protections, aligning India’s labour ecosystem with global standards. Therefore, these changes are bound to impact every category of worker, including corporate employees, factory workers, gig workers, and those in the unorganised sector.
Universal Minimum Wage
The government will now set a statutory floor wage based on minimum living standards. States must ensure their minimum wages remain above the statutory floor wage, creating nationwide uniformity. For the first time, all employees, including unorganised-sector workers, are covered. The new wage definition brings clarity. “Wages” will now include basic pay, dearness allowance, and retaining allowance. At least 50% of total compensation must be basic pay, preventing companies from inflating allowances. This change may lead to lower take-home salaries but higher PF and gratuity benefits, as per labour experts quoted in earlier policy discussions.
Gender Equality
The codes prohibit gender-based wage discrimination, ensuring equal pay for equal work. Timely wage payment rules now apply to all employees earning up to Rs 24,000 per month, widening protection.
Work Hours and Overtime
The weekly cap remains 48 hours. Daily limits may be increased, but overtime must be paid at twice the normal rate. For the first time, work-from-home provisions are officially recognised, especially for services and IT sectors, giving companies and employees more flexibility. Gig and platform workers, drivers, delivery partners, and freelancers will receive social security benefits. Aggregators will contribute 1–2% of their turnover into a dedicated social-security fund.
 Industrial Relations: The threshold for requiring government approval for lay-offs, retrenchment, and closure has increased from 100 to 300 workers.
Employees must now give a 14-day strike notice, preventing sudden flash strikes. The codes introduce an inspector-cum-facilitator system with web-based, algorithm-driven inspections, reducing harassment.
Compliance, from licenses to registers, is now digitised under the “One License, One Registration” rule.
Gratuity for Fixed-Term Employees
Fixed-term workers will now get gratuity on a pro-rata basis, without needing to complete five years.
Factory and Contract Labour
Factories with 20 workers (with power) and 40 workers (without power) will now come under the Factory Act.
The Contract Labour Act applies to establishments with 50 or more contract workers.