Hemant Deshpande
Author, Consultant, Trainer
President, Labour Laws & Management Consultants Association
The Indian government announced four new Labour Codes on wages, social security, industrial relations, and occupational safety, effective November 21, 2025, consolidating 29 existing laws for simplified compliance.
Included Codes: The Code on Wages (2019), Industrial Relations Code (2020), Code on Social Security (2020), and Occupational Safety, Health and Working Conditions Code (2020).
Impact: Changes include revised salary structures (50% basic pay), increased gratuity, faster PF contributions, and updated work hours and leave rules.
Implementation Status: The central government has issued codes, while state governments are finalizing their rules, with some extending into early 2026.
Employers must align their payroll, HR policies, and compliance procedures to these new regulations w.e.f. 21 November 2025.
Key Impact areas for Employers and Employees-
Wage Structure & Costs: Redefine wage components so that allowances do not exceed 50% of the total CTC, increasing PF and gratuity liabilities which may lower net take-home pay.
Increased Social Security: Extend ESIC/PF coverage to all workers, including gig and contract
Working Conditions: Shift to a 48-hour workweek, permitting 12-hour shifts, with double pay for overtime, resulting in 4-Day work & a 3-day weekend
Compliance Simplification: Single registration, license, and return replace multiple filings
Layoffs & HR: Establishments with up to 300 workers can lay off or close without government permission.
Women Empowerment: Women can work night shifts if they consent (subject to the safety measures); pay must be equal
Termination & Benefits: Full salary paid within two days of resignation.
Gratuity & Leave: Fixed-term employees are eligible for pro-rata gratuity after one year, and leave encashment is allowed for leave over 30 days
Free Health Checkup: Employees aged 40 and above are entitled to a mandatory free annual health checkup to facilitate early detection of lifestyle or age-related diseases.
Mandatory Documentation: Written appointment letters are essential for protecting workers’ rights and benefits
Minimum Wages: Under the Code on Wages, 2019, all workers to receive a statutory right minimum wage payment. -Minimum wages and timely payment will ensure financial security
Inspector Cum Facilitator System: Shifting towards guidance, awareness and compliance support rather than punitive action.
Increase in Minimum Fines: Rs. 50,000/- onwards.
Hemant Deshpande
Author, Consultant, Trainer
President, Labour Laws & Management Consultants Association
bramhanand@yahoo.co.in
+91 9960458989
