India’s new labour codes mark one of the biggest reforms in employment laws in decades. These codes combine multiple existing labour acts into four major categories—Wages, Social Security, Industrial Relations, and Occupational Safety. The goal is to simplify compliance, protect workers’ rights, and align India’s workforce policies with global standards. The codes will reshape workplace structures, HR policies, leave systems, and compensation models across industries.
New Rules to Reshape HR Policies & Pay Structures
The new labour laws are expected to bring significant changes to how companies design
salaries and employment contracts. One of the biggest shifts is the new formula for calculating basic pay. Under the upcoming framework:
- Basic salary must form at least 50% of total pay.
- Provident Fund (PF) contributions may increase due to a higher basic pay component.
- In-hand salary may decrease slightly for some employees while long-term retirement savings rise.
- Gratuity rules will expand, allowing more employees—including fixed-term and gig workers—to qualify.
- Overtime, leave encashment, and working hour structures will follow uniform national standards.
These changes aim to create fair pay structures across sectors, reduce wage inequality, and offer greater social security coverage.
Key Highlights: How Workers Can Defend Their Rights
The new framework introduces stronger worker protections. Some important elements include:
- Clear overtime rules with capped weekly work hours and mandatory higher pay for extra shifts.
- A defined process for termination, ensuring fair inquiry and written communication.
- Provisions for work-from-home arrangements in certain sectors.
- Improved transparency in salary components and timely wage payments.
- Statutory benefits for contract, platform and gig workers.
These provisions strengthen employee rights and help individuals understand how to defend your rights in workplace disputes or unfair practices.
Gig Workers: What Changes for Them?
For the first time in India, the new labour codes officially include gig workers—delivery partners, cab drivers, freelancers, and platform-based service workers. They will receive:
- Access to government-backed social security schemes
- Insurance and health benefits funded jointly by platforms and the government
- Protection against arbitrary deactivation or removal from digital platforms
- Better grievance redressal mechanisms
This is a major shift, offering social security to millions who previously had no formal protection.
Who Stands to Benefit?
The new codes impact different categories in different ways:
- Full-time employees: better retirement savings, structured work hours
- Gig workers: social security for the first time
- Fixed-term workers: access to gratuity even without five years of service
- Companies: simplified compliance and unified rules
- Contract workers: clearer rights and safety regulations
Key Details
- Gratuity becomes more accessible, especially under new labour laws gratuity reforms.
- Minimum wage rules will apply uniformly across states.
- Working hours may shift to a 48-hour weekly limit with flexible shifts.
- PF and gratuity components will increase for many employees.
- Employers must ensure health and safety standards as per updated codes.
Disclaimer
This article provides an overview based on publicly available information related to the new labour code 2025. Specific implementation details may vary once final notifications are released by the government. Readers should consult official labour ministry updates or HR professionals for personalized guidance.
FAQs
Q1: Do the new labour codes increase gratuity benefits?
Yes. Under the gratuity new rules, even fixed-term and gig workers can qualify without completing five years of continuous service.
Q2: Will in-hand salary reduce under the new laws?
It depends on the employer’s structure. With basic salary set at 50%, PF contributions may rise, leading to slightly lower in-hand pay but higher long-term savings.
Q3: Are gig workers now protected under the new labour codes?
Yes. Gig workers receive social security coverage, insurance benefits, and clearer protection against unfair treatment by digital platforms.
