New Labour Codes 2025: What every worker across India needs to know

‘Wages’ will now uniformly consist of basic pay, dearness allowance and retaining allowance.

India's new labour codes consolidate a wide range of existing workplace laws into a single, modern framework aimed at making hiring practices, wage rules, social security benefits and working conditions clearer and more consistent across industries. With features such as universal minimum wages, protections for gig and platform workers, streamlined compliance systems and more flexible work-from-home options, the codes seek to balance employee welfare with ease of doing business.

Universal Minimum Wages

The new framework extends minimum wage requirements to all workers, including those in the unorganised sector, ensuring broader coverage across employment types. The rule applies to all employees, with government employers accounting for more than 30% of the workforce covered.

Statutory Floor Wage

A central floor wage will be set based on minimum living standards. State governments must fix their minimum wages above this nationally determined floor.

Standardised Definition of Wages

"Wages" will now uniformly consist of basic pay, dearness allowance and retaining allowance. At least half of an employee's total compensation must fall under these components, preventing excessive reliance on allowances and ensuring uniformity in wage calculation.

Gender Equality in Pay and Hiring

Employers cannot differentiate wages or job conditions on the basis of gender when employees perform similar work.

Universal Wage Payment Rules

The wage payment provisions now cover all employees earning up to ₹24,000 per month, helping ensure timely and fair payments across sectors.

Overtime Benefits

Employees must be compensated at no less than twice their regular wage rate for overtime work.

Decriminalisation of Minor Offences

Most violations that previously attracted imprisonment will now result in monetary penalties, except for serious offences.

Higher Thresholds for Layoffs, Retrenchment and Closure

The requirement for government approval in these cases has been increased from 100 to 300 workers, with states permitted to set even higher limits.

Work-From-Home Flexibility

The codes formally recognise work-from-home arrangements in service industries, offering flexibility for both employees and employers.

Improved Dispute Resolution

A two-member tribunal will handle disputes to speed up proceedings and reduce case pendency.

Mandatory Strike Notice

Employees must give a 14-day notice before going on strike. Strikes are prohibited during this notice window and during ongoing negotiations, reducing the likelihood of sudden industrial action.

Social Security for Gig and Platform Workers

Aggregators will contribute 1-2% of their turnover toward social security schemes for gig and platform workers.

Gratuity for Fixed-Term Employees

Fixed-term workers will be eligible for gratuity on a proportional basis without needing to complete the traditional five-year minimum.

Inspector-Cum-Facilitator Model

Inspections will be carried out using a randomised, algorithm-driven system to promote transparency and reduce harassment.

Compounding of Offences

Certain violations may be settled through monetary payment, easing the burden on the judicial system.

Digital Compliance

All licences, registers and returns can be maintained electronically, reducing paperwork and improving efficiency.

Single Licence and Registration System

Centralised filing for inspections, returns and registrations simplifies compliance for businesses.

Formal Appointment Letters

Employers must issue formal appointment letters to all employees, including those working in the unorganised sector.

Night Shifts for Women

Women can work night shifts in all sectors, provided they consent and adequate safety measures are in place.

Revised Contract Labour Rules

The Contract Labour Act will now apply to establishments employing 50 or more contract workers.

Higher Factory Thresholds

Units with 20 workers (with power) or 40 workers (without power) will now qualify as factories, raising the earlier thresholds.

Working Hours and Overtime Rules

The weekly work limit remains 48 hours. Daily working hours may be extended as long as the total weekly limit is maintained and overtime is paid at double the regular rate.