India Implements the Four Labour Codes: What It Means for Workers & Employers
- rit arora
- Dec 21, 2025
- 3 min read
By Lex Horizon
On 21 November 2025, the Ministry of Labour & Employment, Government of India announced the implementation of the four Labour Codes, marking one of the most significant labour law reforms since Independence. These Codes consolidate 29 central labour laws into a simplified, modern framework aimed at improving wages, safety, social security, and ease of compliance for businesses, while strengthening worker protections across sectors.
This reform is a watershed moment for India’s workforce—especially gig workers, women, MSME employees, and those in the unorganised sector.
Why Were the Labour Codes Needed?
India’s labour laws were largely drafted between the 1930s and 1950s, reflecting an industrial economy very different from today’s gig-driven, service-oriented workplace. Over time, fragmented regulations increased compliance burden and left many workers outside the social security net.
The four Labour Codes address these gaps by:
Reducing regulatory complexity
Expanding social security coverage
Aligning India’s labour ecosystem with global standards
Balancing worker welfare with industry flexibility
The Four Labour Codes at a Glance
1. Code on Wages, 2019
Universal minimum wage for all workers (earlier limited to scheduled employments)
Timely payment of wages made mandatory
Introduction of a National Floor Wage to ensure a basic living standard
2. Industrial Relations Code, 2020
Faster and predictable dispute resolution
Streamlined rules for layoffs, retrenchment, and closure
Two-member Industrial Tribunals for efficiency
3. Code on Social Security, 2020
Social security coverage extended to all workers, including gig and platform workers
PF, ESIC, insurance, and pension benefits widened
Aadhaar-linked Universal Account Number (UAN) for portability across states
4. Occupational Safety, Health and Working Conditions Code, 2020
Uniform safety and health standards across sectors
Mandatory free annual health check-ups for workers above 40
Enhanced safety norms in hazardous industries
Key “Before vs After” Changes
Area | Before | After Labour Codes |
Appointment Letters | Not mandatory | Mandatory for all workers |
Social Security | Limited coverage | Universal coverage including gig workers |
Women at Work | Restrictions on night shifts | Allowed with consent & safety |
Compliance | Multiple registrations | Single PAN-India registration & return |
Healthcare | No annual check-ups | Mandatory free annual check-ups |
Sector-Wise Impact: Who Benefits the Most?
Women Workers
Equal pay for equal work
Permission to work night shifts with safeguards
Mandatory representation in grievance redressal committees
Expanded family definition for social security benefits
Gig & Platform Workers
Legal recognition for the first time
Mandatory contributions by aggregators
Portable welfare benefits across India
MSME & Contract Workers
Guaranteed minimum wages
Access to PF, ESIC, and paid leave
Reduced compliance burden for small establishments
Youth & First-Time Workers
Mandatory appointment letters
Formal employment records
Protection against wage exploitation
What This Means for Employers
While the Codes increase employer responsibilities in areas like social security and worker safety, they also:
Cut red tape through single registration and licensing
Replace inspector-driven enforcement with Inspector-cum-Facilitators
Encourage formalisation and direct hiring
Provide legal certainty and uniform standards nationwide
A Step Towards a Future-Ready Workforce
Over the past decade, India’s social security coverage has expanded from 19% (2015) to over 64% (2025). The implementation of the Labour Codes builds on this momentum, placing workers at the centre of labour governance while supporting economic growth and ease of doing business
Lex Horizon Insight
The Labour Codes are not merely a legislative consolidation—they represent a paradigm shift in how India views work, workers, and welfare. However, practical impact will depend heavily on state rules, sectoral compliance, and effective implementation. Employers and workers alike should seek timely legal guidance to navigate this transition smoothly.
