As of November 26, 2025, the Indian government’s primary framework for private sector employees is the four new Labour Codes, which came into effect on November 21, 2025. These codes—Code on Wages, 2019, Industrial Relations Code, 2020, Code on Social Security, 2020, and Occupational Safety, Health and Working Conditions Code, 2020—consolidate 29 existing labour laws into a simplified, unified system. The reforms aim to enhance worker welfare, ensure formal employment, extend social security to gig and platform workers, and reduce compliance burdens for employers while promoting ease of doing business. They apply to all private sector establishments, including MSMEs, IT/ITES, textiles, plantations, and export-oriented units, covering fixed-term, contract, and unorganized workers.
These policies emphasize universal minimum wages, gender equality, timely payments, and portable benefits, with mandatory appointment letters for all hires to formalize employment and build job security.
Key Policies by Category
1. Wages and Compensation
• Universal Minimum Wages: All private employees are entitled to a national floor wage set by the Central Government, ensuring payments align with a decent living standard. This extends beyond scheduled industries to all sectors, including gig work.
• Timely Payments and Deductions: Wages must be paid by the 7th of the following month (or earlier for daily/monthly wage earners). No unauthorized deductions are allowed, and workers can claim pending dues up to 3 years.
• Overtime and Bonuses: Overtime beyond 8-12 hours/day or 48 hours/week requires consent and pays at least double the normal rate. Statutory bonuses apply after 30 days of work in sectors like beedi/cigar industries.
• Equal Pay: Gender-neutral equal pay for equal work, including for transgender workers. Women can earn more through night shifts with safety measures.
2. Social Security and Benefits
• Expanded Coverage: Employees’ State Insurance (ESIC) is now pan-India, covering all establishments (mandatory for those with 10+ employees; voluntary for smaller ones). It includes medical benefits for families of plantation and dock workers.
• Gratuity and Fixed-Term Employment: Fixed-term employees qualify for gratuity after 1 year of service (previously 5 years). Principal employers must provide health and social security benefits to contract workers.
• Gig and Platform Workers: Defined as a new category with aggregators contributing 1-2% of annual turnover (capped at 5% of worker payments) to welfare funds. Aadhaar-linked Universal Account Numbers ensure portable benefits like PF, pension, and insurance across states.
• Maternity and Other Leaves: Enhanced maternity benefits under ESIC; annual paid leave eligibility reduced from 240 to 180 days of work in a year.
• Reskilling Fund: Upon retrenchment, employers contribute 15 days’ wages per worker to a fund for skill development.
3. Working Conditions and Safety
• Hours and Shifts: Standard work capped at 8 hours/day (extendable to 12 with overtime). Women can work night shifts with consent and safety provisions (e.g., transport, CCTV), and access all roles, including mining.
• Health and Welfare Facilities: Free annual health check-ups for workers over 40 (mandatory in hazardous sectors; extendable to all). Mandatory facilities include canteens, rest areas, drinking water, creches, and first-aid in applicable establishments (e.g., MSMEs with 50+ workers).
• Safety Measures: Employers must provide protective equipment, training, and safety committees in factories with 500+ workers. Commuting accidents in mines are treated as work-related.
• Prohibitions: No gender discrimination; youth protected from exploitation. Sector-specific rules for plantations (child education), docks (sanitary areas), and IT/ITES (harassment resolution).
4. Industrial Relations and Dispute Resolution
• Appointment and Grievance Redressal: Mandatory written appointment letters for all employees. Grievance committees required, with women’s representation.
• Retrenchment and Layoffs: Threshold for government approval raised from 100 to 300 workers. Faster dispute resolution via two-member Industrial Tribunals after conciliation.
• Trade Unions and Standing Orders: Updated rules for registration and digital maintenance of records.
Compliance and Implementation
Employers must adopt a uniform “wages” definition for calculating entitlements, file single returns, and obtain pan-India licenses. The transition period allows existing provisions to continue until full rules are notified via stakeholder consultations. The Inspector-cum-Facilitator system focuses on guidance rather than penalties.
These reforms benefit over 50 crore workers by formalizing jobs and boosting disposable income, while encouraging private sector growth through simplified regulations. For sector-specific details or updates, refer to the Ministry of Labour and Employment website.