Add thelocalreport.in As A Trusted Source
Together, These replace or rationalize 29 existing central labor laws Earlier it was scattered in many areas.
key pillars
Minimum Wages and Timely Payment (Wage Code): All workers should receive the statutory minimum wage and have the right to prompt payment.
Social security coverage for all types of workers including gig, platform and unorganized sector (Social Security Code): Providing benefits like provident fund, insurance and pension, wherever applicable.
formalization of employment: Compulsory appointment letters, better contract terms and benefits for fixed-term and contract workers.
Occupational Safety, Health and Working Conditions (OSHWC Codes): Uniform safety standards, annual health checks for older workers, simplified licensing and reporting across many employer categories.
Industrial Relations (Industrial Relations Code): Clear rules on trade union recognition, grievance mechanisms and simple dispute resolution framework.
Benefits to all major working classes
Gig, platform and unorganized sector workers: The Social Security Code includes definitions like ‘gig worker’, ‘platform worker’ and ‘aggregator’. This means that these employees will now come under the ambit of social security, from which earlier they were largely excluded. The reforms aim to bring these workers into formal schemes and welfare funds.
Fixed term, contract and temporary employees: Workers working on fixed-term contracts now receive the same benefits (leave, gratuity, social security) as permanent workers and become eligible for gratuity after one year of continuous service instead of a longer period. This helps in reducing excessive contingency.
Women, Youth and Migrants:
Women: Greater flexibility over roles and shifts (including night shifts subject to consent and safety criteria), and formal recognition of work rights.
Youth: Minimum wages, formal appointment letters and clear employment conditions in all sectors.
Migrant and Inter-State Workers: The OSHWC Code makes it easy for migrant workers to register, avail benefits across states and claim rights under the national portal.
Read also, Explainer: How India’s new labor code changes gratuity and provident fund rules for workers
MSME, Manufacturing, Export and Construction Sector: The new codes bring simplified compliance with the ‘single registration, single license, single return’ framework. It reduces administrative burden, helps in clarity of rules and promotes ease of doing business – especially for labour-intensive industries like manufacturing, construction and textiles.
Formal Workforce and Organized Sector: For workers in the formal/organized sectors, certainty of minimum wages, mandatory appointment letters, annual health check-ups (for those above 40 years of age), and better safety nets mark a significant upgrade from the old fragmented law-base.
| Speciality | pre-reform regime | post reform regime |
|---|---|---|
| appointment letter | not universally required | Mandatory for all workers |
| minimum wage | For scheduled industries only | Statutory rights for all workers |
| social security coverage | limited to certain areas | Coverage extended to all workers including gig and platform |
| Safety and Health Requirements | Diverse and fragmented in laws | Uniform National Standards, Annual Health Checkup |
| compliance framework | Multiple Licenses, Returns, Authorizations | Single Registration/License, Single Return |
why it matters?
Many of India’s labor laws were drafted before and in the early decades after independence, when the structure of the economy and the nature of work bore little resemblance to today’s environment. While most major economies modernized and consolidated their labor systems over time, India continued to operate under a fragmented and often outdated framework spanning 29 central laws.
The changes in the four labor codes mark a major structural reset. As the Government implements the Code, it will also formulate related rules and schemes through extensive public and stakeholder consultation, while ensuring that provisions under existing Acts continue to be in place during the transition.
Over the past decade, India has increased social security coverage from just 19% of the workforce in 2015 to over 64% in 2025 – a globally acknowledged milestone. The implementation of the four labor codes is based on this, widening the social safety net and embedding portability of benefits across states and territories.
By providing stronger protections and nationwide rights to women, youth, gig, migrant, unorganized and contract workers, the Code places workers firmly at the center of labor governance.