India’s New Labour Codes represent one of the most significant overhauls of workplace regulations in decades. After years of discussion, consultation, and phased preparation, the new framework has officially come into force, replacing multiple outdated laws with a cleaner, unified set of standards. Whether someone works in IT, manufacturing, logistics, retail, media, plantations, start-ups, or the expanding gig and creative economy, these reforms touch nearly every corner of the workforce.
The aim is clear: simplify compliance, ensure clarity, strengthen protections for workers, and reduce ambiguities that earlier created vast differences between regions and industries. But while the labour codes promise modernization, employees must understand exactly what has changed — and how these changes affect salaries, benefits, workplace safety, and day-to-day operations.
Table of Contents
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- Background: What Are the New Labour Codes?
- 1. Gratuity After One Year for Fixed-Term Employees
- 2. Paid Leave Eligibility Becomes Easier
- 3. Clear Working Hours and Higher Overtime Pay
- 4. Mandatory Appointment Letters for All Workers
- 5. Universal Minimum Wages
- 6. Will Take-Home Pay Reduce Under the New Wage Structure?
- 7. Timely Salary Payments for All Employees
- 8. Commute-Related Accidents Recognised as Workplace Incidents
- 9. ESI Coverage Expanded Nationwide
- 10. Formal Protections for Media, Digital and Audio-Visual Workers
- Conclusion: A New Era for Indian Workforce Rights
Background: What Are the New Labour Codes?
The Government of India consolidated 29 separate labour laws into four streamlined codes:
- Code on Wages
- Industrial Relations Code
- Social Security Code
- Occupational Safety, Health and Working Conditions (OSH) Code
This consolidation reduces complexity, brings uniformity, and attempts to make labour regulations fairer and easier to enforce. Employers now have clearer obligations, and employees gain more predictable protections.
1. Gratuity After One Year for Fixed-Term Employees
One of the most impactful changes in the New Labour Codes is the eligibility criteria for gratuity. Traditionally, employees needed five continuous years of service to earn this benefit. But fixed-term employees often worked long durations without receiving these protections.
Under the new code, fixed-term employees qualify for gratuity after just one year. This benefits workers in fields such as:
- Information Technology
- Manufacturing and assembly units
- Media and journalism
- Logistics and delivery services
- Customer support and retail
Experts say the move balances flexibility for companies while ensuring that employees on short contracts are not deprived of long-term benefits.
2. Paid Leave Eligibility Becomes Easier
Earlier, employees needed to work a minimum of 240 days per year to qualify for annual paid leave. This excluded seasonal workers, part-timers, and shift-based staff.
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The new rule lowers the threshold to 180 days of work. This makes leave benefits accessible to lakhs of workers who previously fell short due to irregular schedules or seasonal workloads.
3. Clear Working Hours and Better Overtime Pay
While the eight-hour workday and 48-hour weekly limit remain, the new framework gives governments flexibility to design modern work schedules. This allows for:
- 4-day workweeks (longer daily shifts)
- 5-day regular work cycles
- 6-day traditional structures
The codes also strengthen protections around overtime. Overtime must be voluntary and is payable at twice the regular wage rate. States may even increase maximum overtime hours for industries needing seasonal surges.
4. Mandatory Appointment Letters for All Workers
Under earlier laws, many service-sector workers never received formal offer letters, making disputes over wages or duties difficult to resolve.
The New Labour Codes now require employers to provide written appointment letters to every employee, including:
- Journalists
- Factory workers
- Retail employees
- Technicians and plant workers
- Digital creators and production crew
This ensures transparency and reduces the exploitation of workers who previously had no documented proof of employment terms.
5. Universal Minimum Wages
Earlier, minimum wages varied widely across sectors and states, often leaving workers in unlisted industries without protection.
The new law brings a national floor wage, meaning:
- Every worker in every industry is now covered
- No state can set wages below the national benchmark
- Disparities across regions will gradually reduce
This is one of the biggest steps toward wage fairness in India.
6. Will Take-Home Pay Reduce Under the New Wage Structure?
Because “wages” now have a uniform definition, many salary components previously categorized as allowances will be brought under the wage bracket.
This means higher employer contributions toward:
- Provident Fund (PF)
- Gratuity
- Statutory benefits
As a result, your take-home salary may reduce slightly. However, long-term savings and retirement benefits grow substantially. Financial planners say this change encourages better financial security over an employee’s career.
7. Timely Payment of Salaries for All Workers
Previously, rules ensuring timely wage payments applied only to workers earning below certain income thresholds.
Now, every employee — regardless of salary — must be paid within the stipulated time period. Delayed payments can attract penalties, making wage protection universal and enforceable.
8. Commute-Related Accidents Recognised as Workplace Incidents
The new laws broaden the definition of workplace accidents to include certain commute-related incidents. If an employee faces an accident while travelling directly between home and the workplace under specific conditions, it may now be classified as a work-related accident.
This change improves access to:
- Insurance claims
- Compensation
- ESI medical benefits
9. ESI Coverage Expanded Nationwide
Earlier, the Employees’ State Insurance (ESI) scheme applied only to notified regions. This left millions without access to medical insurance and safety nets.
The New Labour Codes expand ESI coverage across India, including:
- Factories
- Shops
- Plantations
- One-person hazardous units
This gives workers improved access to hospitalization, disability support, and maternity benefits.
10. Formal Protection for Media, Digital and Audio-Visual Workers
One of the most overlooked yet transformative updates affects creative professionals. Journalists, OTT crew members, digital creators, sound engineers, lighting staff, dubbing artists, and post-production workers must now be issued formal appointment letters.
This ensures clarity on:
- Working hours
- Payment cycles
- Safety obligations
- Overtime provisions
The move brings long-awaited protection to an industry historically marked by informal employment practices.
Conclusion: A New Era for Indian Workforce Rights
The New Labour Codes promise to modernise India’s labour ecosystem, increase transparency, strengthen social security, and address long-standing gaps in employee protection. While companies must rework compliance frameworks, employees gain clearer rights, better benefits, and wider access to insurance and financial security.
As India’s economy evolves, these reforms aim to ensure that workers — whether on factory floors or digital studios — receive the protections they deserve.
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By The News Update— Updated November 23, 2025
