India’s labour market has undergone a major transformation with the Union government officially implementing all four new labour codes from Friday. These landmark reforms significantly expand worker benefits, introduce a national minimum wage, and redefine employment rules across industries.
One of the biggest changes is that fixed-term employees will now be eligible for gratuity after just one year of continuous service, replacing the earlier requirement of five years. In addition, a national minimum wage will now apply to all workers across the country, instead of being limited to specific scheduled industries.
Union labour minister Mansukh Mandaviya announced the rollout of the four labour codes—passed by Parliament between 2019 and 2020—and the corresponding rules necessary to operationalise them.
Gig and Platform Workers Recognised for the First Time
The laws formally recognise gig and platform work, bringing millions of app-based workers under a policy framework.
According to Section 2(35) of the Social Security Code, 2020, a gig worker is someone who earns outside a traditional employer–employee relationship.
Major Benefits and Changes Under the New Labour Codes
- Free annual medical checkups for all workers above 40.
- Mandatory written appointment letters for every employee.
- Fixed-term employees to receive the same benefits as permanent workers, including regulated working hours, medical benefits, and leave.
- Timely salary payments, with IT companies required to disburse salaries by the 7th of every month.
- Women allowed to work night shifts and enter hazardous-sector jobs such as mining, provided safety measures and consent are ensured.
Background: Overhauling 29 Old Labour Codes
The four codes—
- Code on Wages (2019)
- Industrial Relations Code (2020)
- Occupational Safety, Health and Working Conditions Code (2020)
- Social Security Code (2020)
—were passed to replace 29 outdated labour laws, but their implementation was delayed multiple times until now.
More Flexibility for Companies, More Security for Workers
The new labour framework gives companies greater flexibility in hiring and firing, while at the same time strengthening job security, workplace safety, and social protection for workers.
Women’s workforce participation is expected to rise as the codes now permit women to work in night shifts and in previously restricted “hazardous” sectors.
ESIC Coverage Expanded Nationwide
Enrolment under the Employees’ State Insurance Corporation (ESIC) is now compulsory for any establishment with even one worker engaged in hazardous activities.
Coverage will also extend nationwide, instead of being limited to select notified areas.