India’s Four Labour Codes Come into Effect

India’s workforce of 608 million people (as of 2024) dwarfs the entire population of most countries. Its wealth of IT, engineering, finance, and healthcare professionals consistently attracts foreign organizations that need to fill roles in these fields. Whether foreign or domestic, companies that hire Indian professionals to work in India must make sure they are up to speed on the country’s four Labour Codes, which went into effect in late November 2025.

The four Labour Codes

India’s Labour Codes include:

1. The Code on Wages, 2019
2. The Code on Social Security, 2020
3. The Occupational Safety, Health and Working Conditions Code, 2020
4. Industrial Relations Code, 2020

The four codes replace 29 central employment laws, and they include consequential changes such as new definitions of “employee” and “worker.” The following lists offer a sample of the changes introduced by each code.

The Code on Wages:

• Establishes a statutory right to minimum wages for employees in both the organized (companies or individuals that are legally registered, regulated, and taxed by the government) and unorganized (groups or individuals operating outside of formal legal frameworks) sectors.
• Expands social security to gig/platform workers and domestic workers.
• Requires the payment of overtime wages of at least twice the normal rate for work performed beyond regular working hours.
• Modernizes occupational safety and health (OSH) and industrial relations procedures.

The Industrial Relations Code:

• Expands the definition of “worker” to cover sales promotion staff, journalists, and supervisory employees earning up to 18,000 INR (approximately $200 USD) per month.
• Updates the criteria for trade union recognition to strengthen collective bargaining.
• Creates a work-from-home provision to improve flexibility.

The Code on Social Security:

• Provides social security coverage for gig and platform workers.
• Expands the definition of “dependents” to broaden family access to benefits.
• Guarantees a gratuity for fixed-term employees after one year of continuous service.

The Occupational Safety, Health and Working Conditions Code:

• Provides free annual checkups for employees.
• Facilitates the development of a national database for unorganized workers that will help migrant workers find employment and provide certain social security benefits.
• Allows courts to designate worker compensation for injury or death by directing 50% of the fines imposed on employers to be paid to victims or their legal heirs.
• Advises entities with 500 or more workers to form safety committees with employer-worker representation to enhance workplace safety and shared accountability.

It’s time to review and update

Among other things, the consolidation of the 29 employment laws into four codes aims to ease compliance, align the laws with the existing economic environment, and enhance employment opportunities. Employers should now review and update their hiring models, employment contracts, job descriptions, and workforce classifications to ensure they are aligned with the codes.

Sources: The Global Economy, EY, Government of India

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