India’s long-awaited labour reforms came into effect on Friday, bringing sweeping changes for workers and employers across the country. The Union government officially notified the rules under the four labour codes passed by Parliament between 2019 and 2020, marking the biggest overhaul of labour laws in decades. Union Labour Minister Mansukh Mandaviya announced the implementation, saying the codes will modernise labour regulations and expand social security coverage.
One of the most significant changes is the reduction in the minimum service requirement to claim gratuity for fixed-term employees. They will now become eligible after completing one year of continuous service, a sharp departure from the earlier five-year rule. The codes also introduce a national minimum wage that will apply to all workers, replacing the earlier system that covered only certain scheduled industries.
For the first time, gig and platform workers have been formally recognised in law. The Code on Social Security, 2020, defines gig workers as individuals who earn through work arrangements outside traditional employer-employee structures. This recognition is expected to pave the way for better welfare and protection for India’s growing platform workforce.
The new provisions mandate compulsory annual medical checkups for workers aged above 40, aimed at strengthening preventive healthcare. Employers will also be required to issue written appointment letters to all workers before they are hired, improving transparency and formalisation in hiring practices.
Fixed-term workers will now enjoy the same benefits as permanent employees, including regulated working hours, leave entitlements and medical benefits. The codes further require all companies to pay salaries on time, while IT firms must ensure that wages are released by the 7th of every month.
The four codes implemented are the Code on Wages, the Industrial Relations Code, the Occupational Safety, Health and Working Conditions (OSH) Code, and the Code on Social Security. These replace 29 older labour laws, many of which had become outdated.
The reforms also expand opportunities for women in the workforce. Women will now be permitted to work night shifts and enter industries classified as hazardous, including mining, subject to their consent and mandatory safety measures. This aligns with the government’s goal of increasing female labour force participation.
Coverage under the Employees’ State Insurance Corporation has also been widened. Any establishment with even a single worker engaged in hazardous processes must now mandatorily enrol under ESIC, and nationwide coverage has been introduced in place of the earlier system of select notified regions.
Overall, the new labour codes aim to strike a balance between ease of doing business and strengthening worker rights, offering companies more flexible hiring rules while enhancing safety, welfare and social security protections for millions of workers across India.
