Four Labour Codes Made Effective from 21 November 2025: Key Changes & Impact

Introduction: India Enters a New Era of Labour Reform

The government of India has announced four Labour Codes w.e.f 21^st November 2025 rationalising 29 existing labour laws. It is a greater step towards the modernising and simplifying labour laws and regulation. It is the foundation of future ready workforce and stronger industry driving labour reform for “Aatmanirbhar Bharat”. 

The four codes now in force are:

• Code on Wages, 2019

• Industrial Relations Code, 2020

• Code on Social Security, 2020

• OSH Code, 2020

It will help to make workplaces safer, secure and ensure timely and fair wages. It will create and expand social security benefits for employees across India.  

A brief detail of four labour codes are:

1. Code on Wages, 2019

Ensures universal minimum wages, timely payment of wages, and a uniform definition of wages across all sectors.

2. Industrial Relations Code, 2020

Streamlines dispute resolution, regulates trade unions, standing orders, and promotes harmonious employer-employee relations.

3. Code on Social Security, 2020

Brings nine social security laws under one umbrella and extends coverage to gig workers, platform workers, and unorganised sector workers.

4. OSH Code, 2020

Unifies workplace safety and welfare laws, ensuring better working conditions and health standards.

The effect of changes can be seen in the below tabular presentation:

	Pre Labour Reforms	Post Labour Reforms
Formalisation of Employment	No mandatory appointment letters	Mandatory appointment letters to all workers. Written proof will ensure transparency, job security, and fixed employment.
Social Security Coverage	Limited Social Security Coverage	Under Code on Social Security, 2020 all workers including gig & platform workers to get social security coverage. All workers will get PF, ESIC, insurance, and other social security benefits.
Minimum Wages	Minimum wages applied only to scheduled industries/employments; large sections of workers remained uncovered	Under the Code on Wages, 2019, all workers to receive a statutory right minimum wage payment. Minimum wages and timely payment will ensure financial security.
Preventive Healthcare	No legal requirement for employers to provide free annual health check-ups to workers	Employers must provide all workers above the age of 40 years with a free annual health check-up. Promote timely preventive healthcare culture
Timely Wages	No mandatory compliance for employer’s payment of wages	Mandatory for employers to provide timely wages, ensuring financial stability, reducing work stress and boosting overall morale of the workers.
Women workforce participation	Women’s employment in night shifts and certain occupations was restricted	Women are permitted to work at night and in all types of work across all establishments, subject to their consent and required safety measures. Women will get equal opportunities to earn higher incomes – in high paying job roles.
ESIC coverage	ESIC coverage was limited to notified areas and specific industries; establishments with fewer than 10 employees were generally excluded, and hazardous-process units did not have uniform mandatory ESIC coverage across India	The benefits of ESIC and coverage will be extended Pan-India - voluntary for establishments with fewer than 10 employees, and mandatory for establishments with even one employee engaged in hazardous processes. Social protection coverage will be expanded to all workers.
Compliance Burden	Multiple registrations, licenses and returns across various labour laws.	Single registration, PAN-India single license and single return. Simplified processes and reduction in Compliance Burden.

Reason to introduce Four Labour Codes

Earlier it was a bundle of compliance burdens for employer and led complexities, confusions due to scattered in 29 legislations.

Key reasons for consolidation:

• Remove overlapping provisions

• Improve ease of doing business

• Encourage formalisation of workforce

• Enhance worker safety and social security

• Create a uniform, transparent compliance system

With implementation of new codes India will be able to balance the work life of labour, compliance burden of employee and growth of Indian economy.  

However, India may face some challenges in early stage of implementation. Some of the major challenges are:

Challenges in Implementation

• Need for awareness among small businesses and workers

• Initial transition costs for updating policies and systems

• State-level rule variations

• Training HR teams on new compliance requirements

To effective management of challenges, the government may introduce awareness programme and enable digital platform more user friendly.

Conclusion: A Landmark Transformation in India’s Labour Landscape

After implementation of the four Labour Codes, there is a high portability of benefits across states and sectors towards social security, stronger protections and effective compliance management. The Codes provide recognition and safety for workers, especially women, youth, unorganised, gig and migrant workers. By reducing compliance burden and enabling flexible, modern work arrangements, the Codes boost employment, skilling and industry growth, reaffirming the Government’s commitment to a pro-worker, pro-women, pro-youth and labour ecosystem.

Author: Prahalad Kumar, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at  Khurana & Khurana, Advocates and IP Attorney.