India’s New Labour Codes & What They Mean for Employees and Employers
With effect from November 21, 2025, the Indian government has rolled out a sweeping reform: four major labour codes Code on Wages, 2019, Industrial Relations Code, 2020, Code on Social Security, 2020 and Occupational Safety, Health and Working Conditions Code, 2020, replacing 29 older labour laws.
These reforms are expected to bring major shifts in employee benefits, working conditions, hiring models and enforcement mechanisms.
A key change lies in how the law now defines who is an “employee” and who is a “worker.” According to a report from Ernst & Young (EY), under the new regime, “employee” covers all individuals working for an employer regardless of role, salary or job level. Meanwhile, “worker” is defined more narrowly: it refers to those doing manual, skilled, technical, operational, clerical or supervisory work. Supervisory-level staff earning more than ₹18,000 per month are excluded from the “worker” category.
Why this matters: Benefits and regulations under certain labour laws (like overtime pay, leave entitlements, social security, safety and working-conditions rules) often apply only to those qualified as “workers,” not to all employees.
Beyond re-classification, the new labour codes introduce several other important changes. There’s a statutory right to a minimum wage for all a national floor wage will be set, ensuring every worker gets a baseline pay regardless of sector.
The reforms also expand social security coverage, now including workers in previously unregulated sectors such as gig or platform workers under formal protections like Provident Fund, insurance, social security, etc.
Standardised norms for working hours, overtime pay, wage payment schedules and written employment letters which were either fragmented or missing under older laws are now formalised uniformly across the country.
In short, the new labour codes aim to modernise and simplify India’s labour-law framework, making it more consistent, accessible and in tune with the changing workforce and economy, but the new definitions and rules will require both employers and employees to reassess their rights, roles and compliance practices under the updated laws.