- within Employment and HR topic(s)
- with Senior Company Executives, HR and Finance and Tax Executives
- in United Kingdom
- with readers working within the Retail & Leisure, Telecomms and Law Firm industries
In a transformative and long-anticipated development in India's employment law landscape, the Government of India has, through a series of notifications dated 21 November 2025, operationalised all four of the country's consolidated labour codes, the Code on Wages, 2019 (Wages Code), the Code on Social Security, 2020 (SS Code), the Industrial Relations Code, 2020 (IR Code), and the Occupational Safety, Health and Working Conditions Code, 2020 (OSH Code). This activation marks the single largest overhaul of labour legislation in independent India, replacing 29 Central labour enactments with a unified, streamlined, and contemporary regulatory framework.
The introduction of these codes represents a decisive shift from a historically fragmented compliance ecosystem, characterised by overlapping definitions, inconsistent thresholds and multiple, sector-specific statutes, to a harmonised structure intended to deliver clarity, reduce administrative burden and align India's labour policy with evolving business and workforce requirements. The consolidated framework lays down common definitions, uniform compliance standards, and integrated mechanisms governing wages, social security, industrial relations, workplace safety, and working conditions across establishments.
1. CODE ON WAGES, 2019: COMPARISON TABLE
| Area | Old Regime (Multiple Acts) |
New Wages Code, 2019 | Sections Notified |
|---|---|---|---|
| Statutes Repealed | Payment of Wages Act, Minimum Wages Act, Payment of Bonus Act, Equal Remuneration Act | All merged into a single code | Section 69 |
| Definition of Wages | Different in each Act: litigation & ambiguity | One uniform definition applicable across PF, ESI, gratuity, retrenchment compensation | Sections 2(y), 2(z) |
| Applicability | Based on wage thresholds or scheduled employments | Applies to all employees irrespective of wage or job category | Sections 1-3 |
| Minimum Wages | Only for scheduled employments | National floor wage and universal applicability | Sections 5-10 |
| Gender Wage Equality | Equal Remuneration Act standalone | Integrated anti-discrimination on wages | Sections 3, 4 |
| Working Hours | Varied across states | Uniform "normal working day" framework subject to state rules | Section 13 |
| Overtime | Fragmented | Standardised + central definition | Section 14 |
| Payment of Wages (including F&F) | Varied timelines, state amendments | Strict timelines, applies to all employees | Sections 17-25 |
| Permissible Deductions | Multiple standards | Single list of valid deductions | Section 18 |
| Bonus | Payment of Bonus Act | Universally applicable, state to notify ceilings | Sections 26-41 |
| Claims, Penalties & Records | Multiple mechanisms | Single harmonised system | Sections 43-66 |
2. SOCIAL SECURITY CODE, 2020: COMPARISON TABLE
| Area | Earlier Statutes | New SS Code, 2020 | Sections Notified |
|---|---|---|---|
| Statutes Repealed | EPF Act, ESI Act, Maternity Act, Gratuity Act, BOCW Act, etc. | All merged into one code | Sections 164(1) - (3) |
| Definitions | Different definitions under each Act | Consolidated definitions | Sections 2(26), 2(61) |
| Coverage of Contract Labour | Ambiguous | Contract labour included as "employee" - gratuity liability on principal employer | Sections 2(26), 53 |
| Fixed-Term Employment | No parity | Full parity and pro-rata gratuity | Section 53 |
| Gig & Platform Workers | Not recognised | National recognition and registration and social security entitlements | Sections 2(35), 109-114 |
| Aggregator Contribution (Gig economy) | No equivalent | 1-2% of turnover (capped at 5% of payouts) | Section 114 |
| PF & Pension Scheme | Existing PF & EPS schemes | New schemes to be notified | Sections 15, 143 |
| ESI | ESI Act | New ESI regime based on standard wage definition | Sections 28-44 |
| Maternity Benefits | Separate Act | Integrated without change | Sections 55-66 |
| Gratuity | Payment of Gratuity Act | Standard wage definition influences computation | Sections 52-56 |
| Unorganised Worker Benefits | Fragmented | National/State Social Security Boards | Sections 6-14, 112-118 |
| Record Keeping & Digital Compliance | Manual | Electronic returns & registers mandated | Sections 122-141 |
3. INDUSTRIAL RELATIONS CODE, 2020 — SECTION-WISE COMPARISON TABLE
| Area | Old Regime | Industrial Relations Code, 2020 | Sections Notified |
|---|---|---|---|
| Statutes Repealed | Trade Unions Act, ID Act, Standing Orders Act | Consolidated into one code | Section 104 |
| Recognition of Negotiating Union | No statutory clarity | Clear requirement for sole negotiating union or council | Sections 14-21 |
| Grievance Redressal Committee | Optional in most establishments | Mandatory for establishments with 20+ workers | Section 4 |
| Strikes & Lockouts | Varied thresholds; 14-day notice only in public utility services | 14-day notice mandatory for all industries | Section 62 |
| Standing Orders | Applicable to 100+ workers | Flexible threshold; Central Govt may reduce | Sections 28-35 |
| Lay-off / Retrenchment / Closure | Chapter V-B threshold of 100 workers | Unified provisions: higher retrenchment cost due to wage definition | Sections 65-75 |
| Worker Reskilling Fund | No equivalent concept | Mandatory 15 day's wages for retrenched worker | Section 83 |
| Unfair Labour Practices | In ID Act Schedule V | Codified clearly | Schedule II, Section 86 |
| Penalties & Compounding | Lower | Higher, uniform penalties | Sections 87-103 |
4. OSH CODE (Occupational Safety, Health & Working Conditions), 2020 -COMPARISON
| Area | Earlier Acts | OSH Code, 2020 | Sections Notified |
|---|---|---|---|
| Statutes Repealed | Factories Act, CLRA, ISMW Act, Plantations Act, Mines Act, Motor Transport Act, BOCW Act, Newspaper Employees Act, etc. | Unified OSH Code | Sections 133-135 |
| Definition of Worker & Establishment | Different by sector | Consolidated definitions | Sections 2(1)(zf), 2(1)(m) |
| Contract Labour in Core Activities | Generally permitted | Prohibited in core activities (with exceptions) | Section 57 |
| Working Hours / Daily & Weekly Limits | State-specific | Standard framework: state to refine | Section 25 |
| Leave Entitlements | Different under state Shops & Establishments Acts | Unified baseline annual leave | Section 32 |
| Night Shifts for Women | Allowed selectively | Universally allowed with safety conditions | Section 43 |
| Migrant Workers Coverage | Only contractor-recruited ISMW workers | Includes own employees relocated from another state | Section 2(1)(zf) |
| Factory Licensing & Registration | Multiple registrations | Single-registration regime | Sections 3-7 |
| Health & Safety Norms | Outdated, sector-based | New standards + annual health checkup for employees >40 years | Sections 18-24 |
| Digital Compliance | Manual registers | Electronic registers, returns, notices | Sections 120-132 |
5. HIGH-IMPACT AREAS ACROSS CODES
| Theme | Old Regime | New Code Framework | Relevant Sections |
|---|---|---|---|
| Unified Wage Definition | None | Standard definition for all labour legislation | Wages Code Section 2(y) |
| Gig/Platform Worker Coverage | No law | Formal recognition and welfare contributions | SS Code Sections 2(35), 109-114 |
| Fixed-Term Employee Parity | No clarity | Full parity and gratuity | SS Code Section 53 |
| Mandatory Grievance Committee | Optional | Mandatory for 20 and workers | IR Code Section 4 |
| Strike/Lockout Notice | Only for public utility services | Mandatory across all establishments | IR Code Section 62 |
| Contract Labour in Core Work | Allowed | Prohibited (some exceptions) | OSH Code Section 57 |
| Migrant Workers Redefined | Only contractor-based | Includes own employees | OSH Code Section 2(1)(zf) |
| Annual Health Check-ups | Not mandatory | Required above 40 years | OSH Code Section 18 |
| Digital Compliance | Fragmented | Mandatory e-filing | Wages Code 50-66, OSH Code 120-132 |
6. EXECUTIVE SUMMARY TABLE
| Code | Old Laws Merged | Key Reforms | Key Sections |
|---|---|---|---|
| Wages Code | 4 laws | Standard wages, universal bonus, gender equality, strict F&F | 1-41, 43-66, 69 |
| Social Security Code | 9 laws | Gig worker recognition, FT gratuity, PF/ESI under one umbrella | 1-164 |
| Industrial Relations Code | 3 laws | Strike notice, negotiating union, uniform dispute framework | 1-103 |
| OSH Code | 13 laws | Core activity ban for contract labour, working hours, safety, migrant worker reforms | 1-135 |
Legitpro Concluding Remarks
The Government's decision to operationalise, whether wholly or partially, the four labour codes marks a defining milestone in India's labour law landscape. By activating a unified legislative framework, the Central Government has begun the transition from decades of fragmented statutes to a consolidated regime governing wages, industrial relations, social security and occupational safety. This marks a decisive shift towards a more coherent and modern regulatory architecture.
However, the reform is still in a transitional phase. The full effect of the codes is contingent upon the notification and enforcement of corresponding Central and state rules, schemes and administrative procedures. As labour is a subject on the Concurrent List of the Constitution, the codes cannot function in their entirety until the delegated rule-making process is completed. While the codes now codify the substantive standards that employers must comply with, the procedural contours, such as registration requirements, formats of statutory returns, working hour norms, mechanisms for recognition of trade unions, inspection protocols, and compliance interfaces, will be shaped by the forthcoming state rules and Central schemes.
In practical terms, employers should anticipate a gradual shift rather than an immediate overhaul. The Union Government has clarified that, during this interim period, the existing laws and rules under the previous regime will continue to operate until the operational framework under the new codes is fully in place. This continuity prevents regulatory vacuum and enables employers to continue relying on the current procedural requirements even while preparing for the changed framework.
In light of this, a measured two-track transition approach is advisable. Organisations should begin identifying areas where their existing processes, policies and documentation will require alignment with the new regime. Simultaneously, they must track state-level notifications which will lay down the procedural steps for implementation. Concerns expressed in the public domain about immediate compliance burdens or cost escalations should be viewed cautiously. The phased rule-making process, coupled with the facilitative intent of the codes, offers breathing space for employers to assess their compliance readiness without fear of sudden administrative action.
A central area requiring careful attention is the revised definition of "wages." The widespread belief that the codes mandate wages to constitute 50% of the total remuneration is incorrect. The codes merely provide a deeming mechanism: if the components qualifying as "wages" fall below 50% of the total remuneration, the calculation of statutory payouts such as overtime, retrenchment compensation, and notice pay will be based on 50% of total remuneration. Additionally, forthcoming social security schemes, yet to be notified, will clarify the extent to which this definition may influence PF, ESI, and related contributions.
It is also important to note that the labour codes do not override state-specific Shops and Establishments Acts. These will continue to operate, and employers will need to carefully navigate overlaps, especially on matters such as working hours and leave entitlements, until further harmonisation emerges.
Once fully operational, the labour codes promise significant improvements: digital interfaces for compliance, streamlined approval mechanisms, centralised definitions and more predictable regulatory processes. India's labour regulation is entering a new era, one designed to balance employer flexibility with stronger worker protections. The transition will be incremental, and organisations that adopt a structured, forward looking approach will be best positioned to navigate the new compliance landscape effectively and confidently.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
