1. Why Were the Four Labour Codes Introduced?

For decades, India had 29 fragmented labour laws covering wages, industrial disputes, social security, factory safety, migrant workers, contract labour and more. Compliance was complicated, and several laws had overlapping or outdated provisions.

The new Labour Codes aim to:

• Simplify and unify labour regulations

• Ensure transparency in wages and working conditions

• Improve social security for all worker categories

• Promote ease of doing business

• Digitize compliance and inspections

• Expand coverage to gig, platform, and unorganised workers

With these reforms, the entire labour framework now functions under only four comprehensive Codes.

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2. 29 Labour Laws Repealed

According to the PDF, the following major laws have been repealed and integrated into the new codes:

• Minimum Wages Act

• Payment of Wages Act

• Maternity Benefit Act

• EPF Act

• ESI Act

• Factories Act

• Contract Labour Act

• Trade Unions Act

• Inter-State Migrant Workmen Act, etc.

These repeals aim to remove redundancies and create a single point of reference for all employment-related matters.

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3. Code on Wages, 2019 – Major Changes

Unified Definition of "Wages"

The Code introduces a standard wage definition used across all four Codes.
Basic Pay + DA + Retaining Allowance must form at least 50% of total salary.
Allowances such as HRA, Conveyance etc. cannot exceed 50% of total pay.

Impact:

• Employers will see higher PF, gratuity, overtime, and bonus liabilities

• Employees will receive higher statutory benefits and increased transparency

Minimum Wages for All

Minimum wages now apply to all employees, not only those in scheduled industries.

Overtime

Any work beyond 8 hours/day or 48 hours/week must be compensated at twice the normal wage.

Gratuity for Fixed-Term Employees

Fixed-term employees become eligible for gratuity after one year instead of five.

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4. OSHWC Code 2019 – Safety, Health and Working Conditions

This Code ensures stronger workplace safety standards and improved working conditions.

Key Provisions

• Single registration for establishments with 10 or more workers

• Mandatory accident reporting

• Women allowed to work after 7 PM, subject to safety measures

• Free annual health check-ups in hazardous workplaces

• Work-from-home is recognised as a workplace under safety obligations

The Code promotes a healthier, safer, and more inclusive work environment.

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5. Industrial Relations Code, 2020 – Trade Unions & Dispute Management

This Code aims to balance industrial harmony with business flexibility.

Key Reforms

• Formal recognition of Negotiating Unions/Councils

• A Worker Re-skilling Fund financed by employers (15 days’ wages per retrenched worker)

• “Strike” now includes mass casual leave by 50% or more workers

• Government permission required for layoff/retrenchment only if a company has 300+ workers

Impact:

• Employers gain flexibility in hiring and restructuring

• Employees get stronger protection and formal grievance procedures

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6. Code on Social Security, 2020 – Universal Social Protection

This Code consolidates EPF, ESI, Maternity, Gratuity, and other social security schemes.

Major Highlights

• Recognition of gig and platform workers for social security

• Creation of a National Database for Unorganised Workers (NDUW)

• Gratuity for fixed-term workers after 1 year

• Expanded definition of dependents

• Work-from-home option for women post-maternity

The Code aims to achieve universal social security across India.

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7. Enforcement: Digital Inspections & Facilitator Model

The new Codes introduce an online inspection system, reducing corruption and unexpected raids.

Key Features

• Inspectors act as Inspector-cum-Facilitators, focusing on guidance

• Inspections are digitally scheduled and transparent

• First-time offences are decriminalized and attract monetary penalties only

• Employers carry the burden of proof through digital records and wage slips

This is a major shift towards modern, technology-enabled compliance.

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Conclusion

The Labour Codes 2025 mark a transformative moment for India’s labour ecosystem. While employers will face increased compliance responsibilities, documentation, and benefit-related costs, workers will enjoy stronger rights, better social security, safer workplaces, fair wages, and improved job protection.

By combining simplification, digitization, and inclusivity, these four Codes aim to create a balanced, transparent, and progressive labour environment for both businesses and workers in India.