Comprehensive Overview of India’s New Labour Law Codes

Introduction

On 21 Nov 2025, the Ministry of Labour & Employment announced the implementation of the Four Labour Codes. The Code on Wages (2019) and the Code on Social Security (2020) have been partially implemented, while the Occupational Safety, Health and Working Conditions Code (2020) and the Industrial Relations Code (2020) are fully in force. The move consolidated 29 laws into a unified framework.

Key Highlights

Replaces over two dozen statutes with four comprehensive Codes: The Code on Wages, 2019, Code on Social Security and Occupational Safety, Health and Working Condition Code.

Key changes include universal minimum wages, timely payments, mandatory appointment letters, nationwide Employees' State Insurance Corporation (“ESIC”) coverage and enhanced social-security benefits like Provident Fund (“PF”), insurance, and gratuity for fixed-term employees after one year.

1. Code on Wages, 2019 - (Partially Effective from 21 November, 2025)

Provisions of the Code	Heading	Summary of the Provisions
Sections 1 - 41	Wages and Bonus Provisions	The Section from 1 to 41 covers definitions, gender equality, minimum and floor wages, wage fixation, working hours, overtime, mode and timing of wage payment, deduction, fines, and all aspects of bonus eligibility, calculation and payment. This mandates fair pay regardless of gender, ensures no worker is paid below government-notified minimum pay, prescribes digital/traceable wage payment modes, strictly regulates deductions and establishes universal bonus entitlements with clear timelines and computation procedures.
Section 42(4) – (9)	State Advisory Board	Mandates every State Government to set up a State Advisory Board to advise on fixing or revising minimum wages, employment opportunities for women, the scope of women’s employment, and other referred matters. The board must represent employers, employees (equal numbers), and independent experts (one-third, including women). Committees/sub-committees and special women’s employment focus are mandated. Decisions consider workforce composition, nature/hours of work, and suitability for women, allowing directions based on Board recommendations.
Sections 43 - 66	Employer Responsibility, Succession Claims and Disputes	Mandates that all dues under the Code be paid directly by the employer (or principal company/firm/proprietor/association). In case of the employee’s death or unknown whereabouts, dues are paid to a nominee or deposited with a designated authority, discharging employer liability. Wage/bonus claims are decided by government-appointed authorities, with the power to grant compensation up to ten times the claim, enforceable as land revenue. Applications may be filed by employees, unions, or inspectors; multiple claims are allowed; a three-year (extendable) limit applies. All bonus disputes are treated as industrial disputes under the Industrial Disputes Act, 1947, using established labor law mechanisms.
Section 67 (1)(a) to (r) Section 67 (2)(u) to (zc) Section 67 (3) to (5)	Rulemaking powers and procedures	Central and State governments are authorised to make rules for implementing all aspects of the Code. Powers include setting wage calculation methods, standards for arduous work, work hour norms, deduction/fine registers, wage slips, bonus and surplus calculation, processes for wage/bonus claims, appeals, nominee dues, audit/inspection, and any other operational procedure needed for compliance and enforcement. All rulemaking is subject to public notification and overrides conflicting laws.
Section 68	Power to remove difficulties	The Central Government may issue orders (published in the Official Gazette) to remove any difficulty in giving effect to any Code provision, provided such orders do not contradict the Code. This power is limited to three years from the Code’s commencement. All such orders must be laid before both Houses of Parliament as soon as made.
Section 69	Repeal and Savings	The Code repeals the Payment of Wages Act, 1936; Minimum Wages Act, 1948; Payment of Bonus Act, 1965; and Equal Remuneration Act, 1976. All actions, notifications, nominations, appointments, or payments made under the old Acts continue under this Code unless inconsistent, until replaced or repealed by notification. The Code invokes Section 6 of the General Clauses Act, 1897, ensuring continuity of prior acts, rights, or liabilities, unless contrary to or replaced under the new Code.

2. Code on Social Security, 2020 - Partially Effective from 21 November, 2025

Provisions of the Code	Heading	Summary
Sections 1 to 14	Social security organisations, Boards/Corporations, Procedures and Functions	The Code applies nationwide, defining key terms and mandating electronic registration and optional cancellation for establishments. It sets up central boards and corporations for Provident Fund and Insurance, with defined compositions and functions, mandates National/State Boards for unorganised workers, building workers’ welfare boards, and outlines removal/disqualification criteria. It covers operational procedures of such boards, the requirement of full-time executive heads, and empowers governments to supersede, reconstitute, or assign extra social security functions and establish regional/local committees for administration.
	Schemes	The Central Government may notify: (a) Provident Fund Scheme for employees/classes and establishments covered under the Code; (b) Pension Scheme for superannuation, retirement, disablement, and survivor pension benefits; (c) Deposit-Linked Insurance Scheme for life insurance benefits; (d) additional social security schemes for self-employed or other classes; and (e) modification of any earlier schemes prospectively or retrospectively. Detailed scheme content is laid out in the Fifth Schedule to the Code.
Section 16 (1)(c)	Deposit Linked Insurance Fund	The Central Government may establish a Deposit-Linked Insurance Fund for the Insurance Scheme. Employers must contribute up to one per cent of employee wages, or as notified, into this fund for each employee. An additional amount, up to one-fourth of the employer's contribution, may also be required for administrative expenses, except benefit costs.
Sections 17 to 141	Chapters on EPF, ESI, Gratuity, Maternity Benefit, Employee Compensation, Unorganised Workers, Gig/Platform Workers, Building workers etc.	Activates the operational provisions or provident fund, ESI, maternity, gratuity, compensation, welfare boards, gig/platform worker social security, and administrative/enforcement mechanisms.
Section 143, except the provisions of the Code specified at serial number (v) of S.O. 2060 (E), dated the 3rd May, 2023	Power to remove difficulties	Allows the central Government to resolve implementation difficulties for three years.
Sections 144 to 163	Employment information, Offences and Penalties and State social security fund	Enforces provisions on vacancy information, returns, penalties, compounding, and constitution /utilisation of State Social Security Funds.
Items 1 and 2 and items 4 to 9 of Section 164 (1)	Repeal and Savings	Repeals the older social security laws, such as the EPF Act.
Section 164 (2)(a) and (c) Section 164 (3)	Savings, continuance of schemes, rights and notification	Preserves existing schemes, rights, notifications, and prior actions unless inconsistent with the code.

3. The Occupational Safety, Health and Working Conditions Code, 2020 - Fully Effective from 21 November, 2025

Provisions of the Code	Heading	Summary
Chapter I	Preliminary	Defines scope which applies to establishments with 10+ workers, all mines and docks, excluding apprentices and some government offices. Provides foundational definitions critical for interpretation: employer, employee, hazardous substance, establishment, factory, contract labour, and more. It sets legal boundaries and clarifies applicability across sectors and geographical zones, including maritime zones.
Chapter II	Registration	Mandates registration for applicable establishments with prescribed process and timelines. Establishes appeal mechanisms against registration decisions. Employers must notify authorities on commencement or cessation of operations, ensuring regulatory visibility and control from the start to end of operations.
Chapter III	Duties of Employers and Employees	Employers must ensure workplaces free from hazards causing injury or occupational diseases, provide free annual health exams, issue appointment letters, and notify authorities promptly on accidents causing death or serious injury. Special duties for factories, mines, docks, plantations include providing risk-free environments and safety training. Employees to comply with safety norms and have rights to raise safety concerns without retaliation.
Chapter IV	Occupational Safety and Health	Constitutes National and State Occupational Safety and Health Advisory Boards for policy advice and oversight. Prescribes comprehensive safety standards addressing physical, chemical, biological hazards with monitoring and medical surveillance. Encourages research, establishes workplace safety committees, and mandates regular safety inspections and health surveys to ensure adherence and continual improvement.
Chapter V	Health and Working Conditions	Places explicit responsibility on employers for maintaining hygienic and healthy working conditions: adequate ventilation, cleanliness, clean potable water, toilets, washing and bathing facilities, proper disposal of wastes and effluents. These provisions codify minimum environmental standards essential for worker health and productivity, especially important in factories, mines, and construction sites.
Chapter VII	Welfare Provisions	Requires employers to provide welfare amenities including canteens, restrooms, first aid, lockers, shelters, crèches for children under six years, especially for vulnerable groups.

4. Industrial Relations Code, 2020 - Fully Effective from 21 November, 2025

Provisions of the Code	Heading	Summary
Chapter I	Title and definitions	It defines the scope of the code and its applicability and puts out the definitions.
Chapter II	Bi-Partite Forums	Requires a work committee in any industrial establishment in which 100 or more workers are employed or have been employed on any day preceding 12 months and mandates a grievance redressal Committee for any industrial establishment with 20 or more workers for the resolution of disputes (the total number of members in the committee shall not exceed 10). It sets a timeline of 30 days for dispute resolution.
Chapter III	Trade Unions	This chapter covers the registration, such as the minimum requirement and cancellation, rights, obligations, and recognition of trade unions.
Chapter IV	Standing Orders	This obligates establishments with 300 or more workers to follow standing orders (previously 100). It covers matters like classification of workers, shift systems, discipline, termination, grievance redressal, etc. Provides procedure for draft submission, certification, modification, appeals, and government model orders.
Chapter V	Notice of Change	Lists out conditions of service such as wages, grades, hours, contributions, rationalisation, etc., that require advance notice of 21 days before any changes. This also specifies exceptions and the process for government intervention.
Chapter VII	Voluntary Arbitration	Enables parties to mutually opt for arbitration in disputes and prescribes agreement forms, appointment of umpire, notification protocols, and scope/authority of arbitrator.
Chapter VIII	Industrial Dispute Resolution	Structures conciliation (officer/board), dispute reference, tribunals, and national tribunals. Sets timelines, confidentiality, and powers similar to civil courts (for evidence, summoning, etc.). Includes rules for settlement, awards, and period of operation.
Chapter IX	Strikes and Lockouts	Establishes mandatory notice periods, restriction during conciliation or adjudication, reporting obligations to government, and procedures for legal industrial action. Details what constitutes illegal strikes/lockouts and bars financial support to unlawful activities.
Chapter X	Lay-off, Retrenchment & Closure	Defines 'lay-off', 'retrenchment', and 'closure'. Sets compensation protocols for laid-off  and retrenched workers – 50 per cent wage; 15 days' pay per year, respectively.  And conditions for precedence and re-employment. It requires a 60-day prior notice for closures. Integrates exceptions to seasonal/intermittent establishments (small establishments).
Chapter XI	Special Provisions- Large Establishments	Mandatory government permission for lay-off, retrenchment, or closure in establishments with 300 or more workers. Sets process for applications, timelines, review, and appeal. Illegal actions without permission trigger full benefit rights for affected workers.
Chapter XII	Worker Re-skilling Fund	Mandates employers pay 15 days' wages per retrenched worker to a fund. Outlines fund source, management, and utilisation, targeting re-skilling and employability.
Chapter XIII	Unfair Labour Practices	Enumerates unfair practices by employers like union interference, victimisation, refusal to bargain, trade unions such as coercion, instigation of illegal strikes, or workers. Provides for penalties and enforcement.
Chapter XIV	Offences & Penalties	Stipulates fines, imprisonment, and compounding of offences for breaches under various chapters. Sets procedure for prosecution/compounding and the role of the government as complainant. Prescribes severity (graduated for repeat offences) and company liability
Chapter XV	Miscellaneous	Contains provisions for removal of difficulties, rulemaking power, delegation, protection of actions taken in good faith, bar on civil jurisdiction, and transitional arrangements. Specifies repeal of prior Acts, legal savings, and process for schedule updates.

Legal Analysis

All four Codes end sectoral fragmentation, replacing over two dozen statutes with unified, principle-based frameworks. This achieves legal clarity, reduces contradictory obligations, and enables cross-sectoral workforce mobility without a regulatory vacuum. The savings and repeal provisions critically maintain the enforceability of prior obligations until replaced, requiring coordinated regulatory transition by both central and state governments.

• The Code on Wages, 2019: Repeals four major wage laws: Payment of Wages Act, the Minimum Wages Act, Payment of Bonus Act, and Equal Remuneration Act, thereby establishing statutory supremacy over all wage, bonus, and remuneration matters. Savings clauses ensure all actions under repealed laws (notifications, appointments, wage rates) remain enforceable until specifically altered, directly addressing continuity of rights and liabilities and mandates state and central fixation of minimum and "floor" wages. No downward deviation is allowed, and all establishments must pay at least the government-notified minimum wage for a schedule of employment. Requires wage payment by cheque, bank transfer, or electronic mode, and limits deductions to a strict 50 per cent cap, sharply reducing employer discretion and minimising wage pilferage risks.

• The Code on Social Security, 2020: Consolidates India’s fragmented social-security regime, which was previously governed by nine separate legislations, into a unified framework intended to extend social security to all employees and workers, either in the organised or unorganised or any other sectors. This Code significantly broadens establishment coverage for Provident Fund, ESI, gratuity, maternity benefits, and compensation. It introduces, for the first time in Indian labour law, distinct statutory categories of “gig workers” and “platform workers” along with the concept of a “digital aggregator”, creating an affirmative obligation for platform-based businesses to contribute to a dedicated social-security fund. The Central Government is empowered to apply entire chapters of the Code to any establishment employing a specified minimum number of people and, once applicable, coverage continues even if workforce numbers fall below the threshold.

  
  

• The Occupational Safety, Health and Working Conditions Code, 2019: Consolidates thirteen earlier legislations relating to factories, mines, dock workers, contract labour, motor transport, and construction, to create a unified framework for workplace safety, health standards, and working conditions, as reflected in the Preamble. The Code requires every establishment employing at least ten workers to obtain mandatory registration and places extensive statutory duties on employers, including ensuring a workplace free from hazards, maintaining specified health and working conditions, and providing welfare. The Code introduces uniform regulations for working hours, overtime, night shifts, compensatory holidays, and annual leave with wages, harmonising standards across sectors previously governed by different laws.

  
  

• The Industrial Relations Code, 2020: Merges three key statutes, the Trade Unions Act, 1926, the Industrial Employment (Standing Orders) Act, 1946 and the Industrial Disputes Act, 1947. This reduces the legal fragmentation and overlap, creating more efficiency in dispute resolution. The threshold of 300 workers up from 100 for seeking government permissions for layoffs, retrenchment, etc. It offers employers more flexibility but potentially dilutes worker protections in smaller/medium establishments. And in Standing Orders, the earlier mandate for 100 and more employees now applies only to 300 or more employees. Model standing orders by the government offer uniformity but less flexibility for specific industries/unique workplace contexts. The Code has also introduced a centralised mechanism for dispute through conciliation, tribunals, and arbitration, and establishes clearer appellate procedures.

Implications

These Codes imposes substantial compliance obligations on companies, particularly in relation to payroll restructuring, classification of employees, and statutory contributions. Employers must ensure accurate categorisation of all workers, including full-time employees, fixed-term workers, contract workers, gig workers, and platform workers, because coverage under PF, ESI, gratuity, and maternity benefits flows directly from these statutory definitions. Companies must restructure their compensation frameworks to align with the statutory definition of “wages,” ensure timely and fully documented wage payments, and account for higher recurring costs arising from PF, ESI, gratuity, and bonus obligations. It also holds a higher threshold and simplified exit options for employers can enhance work flexibility but may also affect job security for workers in small establishments. The recognition of sole negotiating unions simplifies bargaining.

Workplace compliances must be upgraded to meet codified safety, health, and welfare standards, while digital registration, electronic record-keeping, and real-time compliance tracking become essential for avoiding penalties. Businesses that rely heavily on contract labour or gig-based models face enhanced liability, including mandatory contributions for gig and platform workers and principal-employer responsibility for contractor defaults. Across sectors, the Codes raise operational costs, increase audit and inspection exposure, and demand significant changes to workforce contracts, vendor.

Disclaimer

The note is prepared for knowledge dissemination and does not constitute legal, financial or commercial advice. AK & Partners or its associates are not responsible for any action taken based on its contents.

For further queries or details, you may contact:

Mrs. Kritika Krishnamurthy

Managing Partner

AK and Partners

info@akandpartners.in