Labour Codes 2025
The four codes in force from 21 November 2025 and what changed for employers.
Key facts
- Four labour codes came into force on 21 November 2025: the Code on Wages 2019, the Industrial Relations Code 2020, the Code on Social Security 2020, and the Occupational Safety, Health and Working Conditions Code 2020. They replaced 29 central labour laws.
- Uniform definition of wages: basic pay, DA and retaining allowance must be at least 50% of total remuneration. Excess allowances are added back to wages for PF, gratuity and bonus.
- Appointment letters are compulsory for every employee.
- Fixed-term employees get the same benefits as permanent staff and become eligible for gratuity after 1 year of service.
- Social security extends to gig and platform workers; aggregators contribute 1–2% of turnover, capped at 5% of payments to such workers.
- Leave: one day of paid leave for every 20 days worked, with eligibility after 180 days of work in a year.
- Overtime is paid at twice the normal wage rate. Women may work night shifts with their consent and safety measures.
- Establishments get a single registration, a single licence and a single return under the codes.
Common questions
When did the new labour codes start?
On 21 November 2025. All four codes (Wages, Industrial Relations, Social Security, and Occupational Safety, Health and Working Conditions) are now in force, replacing 29 older labour laws.
What is the 50% wage rule?
Under the labour codes, basic pay, DA and retaining allowance must be at least 50% of total pay. If allowances are more than 50%, the excess counts as wages for PF, gratuity and bonus, which can raise those contributions.
Are fixed-term employees entitled to gratuity?
Yes. Under the Code on Social Security, fixed-term employees are eligible for gratuity after 1 year of continuous service, on a proportionate basis. Other employees still need 5 years.
Is an appointment letter compulsory now?
Yes. Every employee must be given an appointment letter under the labour codes.
Do gig workers get social security?
Yes. The Code on Social Security covers gig and platform workers. Aggregators contribute 1–2% of annual turnover, capped at 5% of the amount paid to these workers, to a social security fund.