Implementation of India’s New Labour Codes (Effective 21 November 2025)

A significant update in India’s labour and employment regulatory landscape. The Ministry of Labour & Employment has activated several provisions under the four Labour Codes with effect from 21 November 2025.

This transition marks a major policy shift — moving from a fragmented set of 29 Central labour laws to a streamlined structure under four consolidated Codes:

• Code on Wages, 2019
• Industrial Relations Code, 2020
• Occupational Safety, Health & Working Conditions (OSHWC) Code, 2020
• Code on Social Security, 2020

While these Codes are now partially or fully operational, the detailed Central and State rules required for complete implementation are still awaited. Until then, certain existing labour laws will continue to operate in parallel with the newly notified provisions.

. Status of Implementation (as of 21 November 2025)

Code	Implementation Status	Key Active Provisions
Industrial Relations Code, 2020	Fully Operational	Trade unions, standing orders, layoffs, retrenchment, and closures
OSHWC Code, 2020	Fully Operational	Working hours, safety, statutory registers, and workplace facilities
Code on Wages, 2019	Partial Rollout	Wage structure, bonus entitlements, payment timelines, and enforcement
Code on Social Security, 2020	Partial Rollout	ESI, maternity, gratuity, administrative bodies, preliminary EPF framework provisions

2. Key Changes Introduced Across the Codes

Consistent Definitions & Wider Workforce Coverage

• A common definition of “wages” now applies across all Codes, standardising calculations for minimum wages, overtime, bonus, and gratuity.
• Broader inclusion of employees, workers, gig workers, platform workers, and inter-state migrant workers.
• The 50% rule: Basic pay + Dearness Allowance must form at least half of the total CTC.

Formal Recognition of Emerging Work Arrangements

• Women are now permitted to work night shifts with appropriate safety measures and written consent.
• Fixed-term employees are eligible for gratuity after one year of service.
• Employers face restrictions on deploying contract labour in core business activities, with limited exceptions.

Expanded Social Security Framework

• Gig and platform workers (e.g., Swiggy, Uber, Zomato) are now covered under social security schemes.
• Aadhaar-linked identifiers ensure portability of benefits across employers and States.
• Aggregators must contribute 1–2% of their turnover (subject to a cap) towards worker welfare funds.
• Social security coverage extends to fixed-term, unorganised, and self-employed workers for the first time.

Revised Industrial Relations Regime

• Employers must now contribute 15 days’ wages to a Reskilling Fund for each retrenched worker.
• All sectors must give 14 days’ notice before any strike or lockout.
• Layoff/closure permission is now required only if the establishment employs 300 or more workers.
• A single Negotiating Union will represent employees to reduce multiplicity of trade unions.
• Faster dispute resolution through Industrial Tribunals replaces lengthy court processes.

Standardised Workplace Conditions (OSHWC Code)

• Working Hours: 8 hours per day, 48 hours per week across all industries.
• Appointment Letters: Mandatory for every worker, formalising employment relationships.
• Women in Night Shifts: Permitted with safety and transport arrangements.
• Single Registration: One registration for all types of establishments (factories, shops, mines, etc.).
• Safety & Health: One consolidated safety law replaces 13 earlier Acts.
• Penalties: Significantly higher fines for safety violations.
• Annual Health Check-ups: Required for all employees aged 40 years and above.

3. Spotlight: The EPF Act, 1952 and ESI Act— The Laws Still Standing

Despite the rollout of the Social Security Code, the Employees’ Provident Fund & Miscellaneous Provisions Act, 1952 remains in force.

Why the EPF Act Is Still Operational

• Under Section 164 of the Social Security Code, 2020, the Government repealed several old labour laws but retained Item 3 — the EPF Act, 1952.
• This retention means the EPF Act and its existing Provident Fund Scheme continue despite the new Code’s partial implementation.
• The key reason: Clause (b) of Section 164 — which enables full transition of Provident Fund schemes — has not yet been notified.
• Once this clause is enforced, a one-year transition period will begin for migration to the new unified Social Security system.

Also, the Employees’ State Insurance (ESI) Act, 1948 has been subsumed into the Code on Social Security, 2020, and the ESI Act will cease to exist once the new code is fully implemented. While the Code on Social Security, 2020 was enacted in 2020, its full implementation has been pending, but has been made effective as of November 21, 2025, with provisions now active and some benefits extended. 

Key changes under the new Code on Social Security, 2020

• Expansion of coverage: The ESI scheme’s coverage is expanded to all establishments across India with 10 or more employees. The ESI coverage is now mandatory even for a single worker in hazardous occupations, and voluntary coverage is allowed for establishments with fewer than 10 employees.
• Coverage for unorganized sector: The Code includes provisions to create special schemes for unorganized workers, gig workers, and platform workers.
• Aadhaar seeding: To receive benefits under the new Code, members will need to have their Aadhaar number seeded with their records.
• Retained benefits: The benefits available under the previous ESI Act have been retained in the new Code. 

Implementation status

• The Code on Social Security, 2020 was enacted in 2020, and its provisions are now in effect as of November 21, 2025.
• While the law has been in place, the full implementation of the Code, including the final rules and notification of all sections, has been pending.
• Some provisions relating to ESI, maternity, gratuity, and governance bodies are now active. 

In Essence

India is moving toward a consolidated labour regime, yet the EPF Act stands as a deliberate exception — ensuring continuity of provident fund operations until the transition framework is formally activated.

4. Simple Comparison of Old vs. New Labour Code Provisions

A. Code on Wages, 2019

Topic	Earlier Law	New Labour Code (Simplified)
Who is covered	Only certain scheduled jobs	All workers covered
Floor Wage	No national minimum	National floor wage to be fixed by Govt
Wages Definition	Different in each Act	Unified definition – 50% of CTC must be Basic + D.A.
Payment Timelines	By 7th/10th monthly	By 7th month-end; within 2 days of exit
Bonus Eligibility	Limited to ₹21,000/month	Wider coverage; limit decided by Govt
Wage Protection	Only below ₹24,000/month	All employees protected
Gender Equality	Equal pay only	Equal opportunity in hiring, training, promotions
Complaint Time Limit	6 months–2 years	3 years
Penalties	Lower fines	Higher fines & strict enforcement

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B. Industrial Relations Code, 2020

Topic	Earlier Law	New Labour Code (Simplified)
Layoff/Closure Permission	Needed for 100+ employees	Threshold raised to 300+
Strike Notice	Only for some sectors	14 days’ notice mandatory across sectors
Unions	Multiple unions caused disputes	One “Negotiating Union” per organisation
Fixed-Term Employees	Not recognised fully	Full parity in benefits including gratuity
Reskilling Fund	Not available	15 days’ wages per retrenched worker paid by employer
Dispute Resolution	Slow and multi-layered	Faster and digitised Industrial Tribunal process

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C. OSHWC Code, 2020

Topic	Earlier Law	New Labour Code (Simplified)
Registration	Separate registrations	One unified registration
Appointment Letter	Not mandatory	Mandatory for all employees
Working Hours	Differed across industries	8 hours/day, 48 hours/week
Women in Night Shifts	Largely prohibited	Allowed with safety norms
Contract Labour Licence	One per State	Multi-State licence valid for 5 years
Leave Encashment	Not uniform	Standardised and encashable
Safety Laws	13 separate Acts	Combined under one Code
Penalties	Lower	Higher and stricter penalties

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D. Social Security Code, 2020

Topic	Earlier Law	New Labour Code (Simplified)
Coverage (PF, ESI, Gratuity, Maternity)	Under separate Acts	Consolidated under one Code
EPF Act Continuity	Operated independently	Continues until full transition clause (b) is notified
Wages Definition	Different in each Act	Single definition (50% rule)
Gig/Platform Workers	Not covered	Now included
Registration	Multiple registrations	One unified registration
Fixed-Term Gratuity	5 years required	Eligible after 1 year (pro-rata)
Aadhaar-Linked ID	No universal ID	Single portable ID for all benefits
PF/ESI Rate Flexibility	Fixed	Govt may reduce during emergencies
Parental Coverage	Limited	Includes parents-in-law for female employees
Health Check-up	Not required	Mandatory for workers 40+
ESIC Coverage	Limited to notified areas	Pan-India; mandatory for hazardous units

5. Guidance for Businesses During the Transition

Although most provisions are now active, complete compliance depends on the release of all Central and State Rules, digital filing systems, and updated schemes. Until then, employers must balance between legacy laws (like the EPF Act, 1952) and the new Code provisions.

Recommended Next Steps

1. Reassess employee classifications under new definitions.
2. Continue EPF compliance under the 1952 Act until notified otherwise.
3. Evaluate wage structures in light of the 50% rule.
4. Review contracts, vendor agreements, and HR policies for alignment.
5. Enhance workplace safety and welfare measures per OSHWC standards.
6. Track further notifications from Central and State governments.

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Key Takeaway:
India’s unified labour code framework simplifies compliance and extends worker protection. However, the EPF Act’s continued operation highlights a phased and cautious transition.
Staying proactive now will ensure smooth adaptation and compliance readiness. If you need support with impact assessment, documentation updates, or a compliance roadmap, our team is available to assist.