New Labour Codes 2025 – Complete Compliance Guide for Employers and Businesses

India has officially implemented the New Labour Codes on 21 November 2025. These codes replace 29 old labour laws and introduce a modern, simplified, and unified framework for wages, social security, industrial relations, and workplace safety.

This guide explains the major changes introduced under the Labour Codes 2025, who they apply to, and what employers must do to stay compliant.

Introduction

The four New Labour Codes are:

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

The main objective of these codes is to simplify old laws, reduce compliance burden for employers, ensure fairness for workers, and bring gig, platform, and contract workers into the formal social security system.

Key Changes Under the New Labour Codes 2025

1. Universal Wage Rules

2. Wages have a uniform definition across all employment types. This affects calculation of:

• minimum wages
• overtime
• gratuity
• PF and ESIC
• leave encashment

4. Minimum wages now apply universally, including for unorganised and gig workers.

5. Social Security for Gig, Platform and Contract Workers

6. The Social Security Code expands coverage to workers who were previously excluded. Gig workers, platform workers, fixed-term employees, and contract workers may get benefits such as:

• PF
• maternity benefit
• pension
• disability and life insurance
• ESIC-type health coverage (where applicable)

7. Employment Conditions and Termination Terms

8. Under the Industrial Relations Code:

• employers with up to 299 employees can restructure workforce without prior government approval
• appointment letter is compulsory for every employee
• reskilling fund applies in certain cases of retrenchment
• notice period and compensation rules have been streamlined

9. Working Hours and Overtime

10. The OSH Code sets flexible working hours:

• daily working hours can be between 8 to 12 hours
• weekly limit remains 48 hours
• overtime must be paid at twice the normal rate
• women can work night shifts with required safety measures

11. Workplace Safety and Facilities

12. Employers must ensure:

• safe working conditions
• clean workplace facilities
• emergency training and safety equipment
• compliance for hazardous processes
• special protections for women workers

13. Simplified Compliance

14. Old registrations and multiple returns are replaced with:

• unified registration
• single annual return in some cases
• fewer inspections
• risk-based digital inspections
• reduced number of offences that attract imprisonment

Who Needs to Comply

All employers, including the following, fall under the new codes:

• MSMEs
• factories
• shops and commercial establishments
• startups
• contractors
• gig and platform companies
• businesses with full-time, part-time, or contract workers

Impact on Businesses

1. Salary structures may need revision to match the new wage definition.
2. More workers (gig, platform, contract) must be recorded and covered under social security.
3. Appointment letters must be issued to every worker without exception.
4. Overtime and work-hour logs must be maintained.
5. Safety guidelines and workplace standards must be updated.
6. Employers must maintain updated compliance records for inspections.

Step-by-Step Compliance Checklist for Employers

1. Review and update salary and wage structure.
2. Issue written appointment letters to all workers.
3. Enroll all eligible workers under PF, ESIC, or social security schemes.
4. Maintain proper attendance, overtime, and wage records.
5. Review HR policies for termination, notice period, and retrenchment rules.
6. Update workplace safety systems and night-shift policies.
7. Revisit contracts with staffing agencies and gig platforms.
8. Train HR and payroll teams on new rules.
9. Monitor state-level notifications as states may release additional rules.
10. Maintain a compliance calendar to avoid penalties.

Important Points to Note

• Some provisions may be implemented gradually depending on state notifications.
• Non-compliance may still attract monetary penalties.
• Businesses should prepare early to avoid last-minute disruptions.
• Small businesses may need to adjust payroll budgets.

Conclusion

The New Labour Codes 2025 represent a major reform in India’s labour framework. They offer simplified compliance for employers and better protection for workers. Businesses that update their compliance systems early will avoid penalties and ensure smoother operations.

These changes also improve transparency, formalisation of employment, and long-term workforce stability. Employers are advised to review their HR, payroll, and documentation systems at the earliest to remain fully compliant under the new labour regime.