India’s labour law landscape has undergone its most profound transformation in decades. On 21 November 2025, the Central Government brought into force the key provisions of all four labour codes:
- Code on Wages, 2019
- Industrial Relations Code, 2020
- Code on Social Security, 2020
- Occupational Safety, Health & Working Conditions Code, 2020
Together, these replace 29 existing statutes with a streamlined framework designed to simplify compliance, protect workers, and promote ease of doing business.
Cross-Cutting Themes
- Unified definition of wages – At least 50% of CTC must be treated as wages for PF, gratuity, and bonus.
- Single registration & unified return – One-time registration on the Shram Suvidha portal, with consolidated returns.
- Inspector-cum-facilitator – Inspectors now act as facilitators, focusing on digital inspections and advisory.
- Digital record-keeping – Employers can maintain registers and submit forms electronically.
- Compounding of first-time offences – Minor contraventions can be settled by paying 50% of the maximum fin
Code on Wages, 2019
- National Floor Wage: States cannot set minimum wages below the notified floor.
- Timely Wage Payment: Wages must be paid by the 7th of the following month.
- Bonus & Overtime: Bonus between 8.33%–20%; overtime at double rate.
- Equal Remuneration: Mandatory gender and transgender equality in pay.
- Full-and-Final Settlement: Must be completed within 2 working days of exit.
Checklist for Employers:
- Rework salary structures to meet wage definition.
- Register on Shram Suvidha and maintain statutory forms.
- Automate FnF workflows and issue final payslips.
Industrial Relations Code, 2020
- Union Recognition: 51% membership = sole negotiating union.
- Standing Orders: Mandatory for establishments with ≥300 workers.
- Lay-off & Retrenchment: Prior government permission required.
- Grievance Committees: Mandatory for establishments with ≥20 workers.
Checklist:
- File Form IR-1 for union registration.
- Draft and certify standing orders.
- Budget for reskilling fund contributions
Code on Social Security, 2020
- Gig & Platform Workers: Aggregators must contribute 1–2% of turnover.
- Gratuity for Fixed-Term: Eligible after 1 year of service.
- Maternity Benefits: 26 weeks leave; crèche for ≥50 employees.
- EPF/ESI Coverage: Extended nationwide, even for small establishments.
Checklist:
- Classify workers correctly (gig, fixed-term, etc.).
- Update policies for gratuity and maternity.
- Educate employees on PF/ESI rights.
Occupational Safety, Health & Working Conditions Code, 2020
- Working Hours: 8 hours/day, 48 hours/week; overtime at double rate.
- Women Employment: Allowed in all sectors, including night shifts.
- Safety Committees: Mandatory for ≥500 workers.
- Migrant Workers: Entitled to travel allowance and social benefits.
Checklist:
- Conduct safety audits and risk assessments.
- Provide appointment letters and health check-ups.
- Maintain registers and report accidents digitally.
Conclusion
The 2025 labour reforms demand strategic alignment across HR, payroll, and legal functions. At Idea Xchange, we believe compliance is not just a duty—it’s a competitive advantage.
By embracing these changes, organisations can ensure clarity, compassion, and compliance—building workplaces that are both legally sound and future-ready.
