29 Existing Labour Laws Replaced; Stronger Worker Rights and Streamlined Compliance for Businesses.
New Delhi – In a landmark move aimed at modernizing India’s labour governance framework, the Government of India has officially enforced all four labour codes across the country from today. The newly operational laws include the Code on Wages (2019), Industrial Relations Code (2020), Social Security Code (2020) and the Occupational Safety, Health and Working Conditions Code (2020).
With this implementation, a total of 29 fragmented and legacy labour legislations have now been consolidated into a single unified labour regulation framework — a step the government calls “historic and transformational for both workforce and industry.”
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Govt Calls It a Structural Economic Reform
Prime Minister Narendra Modi termed the rollout of labour codes as a milestone for both worker empowerment and Ease of Doing Business. In a statement shared on X (formerly Twitter), he wrote:
“Shramev Jayate! Implementing the four labour codes marks a decisive shift toward fairness, security, and workplace dignity for every worker in India.”
The centre believes the move will create a transparent, predictable and business-friendly regulatory environment while ensuring welfare, safety and social inclusion for all categories of employees.
Why the Reform Was Needed
Many of India’s previous labour laws date back to the period between 1930 and 1950, when the industrial ecosystem was small, manufacturing-centric, and largely unorganized. Over time, multiple overlapping rules and compliance requirements resulted in ambiguity and operational burden.
A government release highlights key challenges of earlier laws:
- Regulatory frameworks were complex and overlapping
- High compliance burden discouraged large-scale hiring
- Social security coverage was fragmented and inconsistent
- Gig, platform and fixed-term workers lacked legal recognition
The new labour framework is designed to address these gaps and enable a modern workforce structure aligned with digital economies, MSME expansion and global manufacturing standards.
Industry Welcomes the Decision
The Confederation of Indian Industry (CII) issued a statement expressing strong support for the reform. CII Director-General Chandrajit Banerjee stated:
“This is one of the most forward-looking reforms in India’s labour history. The new codes provide balance — ensuring security for workers and stability for employers.”
Industry bodies said the changes will help India become more competitive in attracting global manufacturing and services investments.
Who Benefits and How: Key Workforce Categories
The reform introduces clear definitions and new benefits for multiple worker segments:
1️⃣ Fixed-Term Employees (FTE)
- Treated at par with permanent staff for wages and benefits
- Eligible for gratuity after one year of service
- Same working hours, leave rules and safety conditions as regular employees
2️⃣ Gig and Platform Workers (Ola, Swiggy, Blinkit, Zomato, etc.)
- Legally recognized for the first time
- Digital platforms required to contribute up to 12% of annual turnover toward a worker welfare fund
- Aadhaar-linked Universal Social Security Account Number introduced
3️⃣ Contract Workers
- Annual mandatory health check-up
- Gratuity eligibility within one year
- Compulsory social security and insurance coverage
4️⃣ Female Workforce
- Permission to work across all sectors, including night shifts
- Mandatory gender-equal remuneration
- Employer must ensure safety measures, transport, monitoring and ICC committees
- Expanded definition of “family” to include in-laws
5️⃣ MSME and Unorganized Sector Employees
- National minimum wage to ensure uniform income standards
- Mandatory overtime payment at twice the wage rate
- Strict timelines for salary disbursal
Additional System-wide Changes
Area Reform Introduced
- National Minimum Wage To be set and periodically revised by Central Government
- Employer Licensing Single licence, single compliance return model
- Workplace Safety Establishment of National OSH Board
- Compliance Relief Relaxed threshold for small factories and MSMEs
Expected Economic and Social Impact
Labour economists and policy experts believe the new codes will:
- Boost investor confidence
- Encourage formal hiring and expand payroll employment
- Strengthen India’s gig and digital workforce
- Improve workplace safety and employee retention
- Reduce litigation and compliance disputes
The reforms are also expected to support India’s positioning as a competitive global manufacturing hub under “Make in India” and “Viksit Bharat 2047” frameworks.
Conclusion
The implementation of four unified labour codes marks not just a legislative change but a structural shift in how India defines the relationship between workers, employers, and the economy. With a focus on fairness, compliance efficiency, digital alignment, and social protection, the reform is expected to play a decisive role in building a future-ready, inclusive, and globally competitive labour ecosystem.
