A big transformation is underway in India’s labour landscape as the long-awaited Labour Codes finally take effect, replacing a patchwork of 29 antiquated laws with a modern, unified framework. The new system seeks to strengthen worker protections, bring millions of informal workers under formal coverage, and simplify compliance for employers operating across diverse sectors of India’s rapidly evolving economy.
These reforms, consolidated into four comprehensive Codes, Wages, Industrial Relations, Social Security and Occupational Safety & Health are designed to address the realities of a labour market where manufacturing units, service industries, high-growth IT sectors and app-driven gig models are expanding simultaneously, often beyond the reach of traditional regulation.
For the first time, India’s gig and platform workers, delivery personnel, ride-hailing drivers and app-based service providers, have been granted legal recognition as part of the country’s labour ecosystem. This marks a historic policy shift for nearly one crore individuals who have long been integral to the digital economy yet remained outside formal protections.
Until now, gig workers performed essential, high-demand tasks without access to wage guarantees, insurance or social security, despite being indispensable to food delivery, e-commerce logistics, mobility services and urban convenience platforms.
A major pillar of the new Codes is the introduction of uniform wage rules applicable across geographic regions and employment categories. Every worker, regardless of the industry, location or nature of their contract, must now receive at least the statutory minimum wage. Salaries are required to be credited by the 7th of every month, stabilising earnings for millions of households that previously suffered from inconsistent payment cycles. The new framework closes loopholes around overtime by mandating double wages for extra hours worked, ending longstanding disputes over compensation.
Fixed Term Employees, widely employed in manufacturing, retail and service sectors will now qualify for gratuity after a year of continuous service, a dramatic reduction from the earlier five-year requirement. Employers are also required to provide mandatory appointment letters, a move expected to enhance job transparency, support legal documentation and enable workers to access government welfare schemes with greater ease.
The Labour Codes additionally introduce significantly stronger standards for workplace health and safety, particularly in high-risk industries such as manufacturing, construction, mining and port operations. Employers must now ensure annual free health check-ups for all workers. Stricter safety protocols, mandatory risk assessments and periodic safety audits have been woven into the legal framework to reduce workplace accidents, occupational diseases and long-term health vulnerabilities. With India historically witnessing a high incidence of industrial accidents, these updated rules aim to minimise fatalities and reinforce accountability at every level of workplace management.
Women workers stand to gain considerably from the reforms, which place gender equity and safer work environments at the centre of policy design. The Codes guarantee equal pay for equal work and permit women to undertake night shifts, provided they consent and workplaces ensure comprehensive safety measures. Maternity benefits have been strengthened, with 26 weeks of paid leave now standardised across sectors. Women will also have expanded opportunities to participate in roles within manufacturing, mining, logistics, IT services and other fields traditionally restricted by outdated regulations.
Notably, these changes could help raise female labour force participation, which has remained among the lowest in the G20 despite steady educational advancement.
Perhaps the most defining shift comes through the formal inclusion of gig and platform workers in India’s labour regulation. Under the new Social Security Code, aggregator platforms such as Swiggy, Zomato, Uber, Ola and Urban Company are required to contribute between 1 percent and 5 percent of their revenue to a dedicated Social Security Fund. This fund will finance insurance schemes, accident compensation, disability benefits, health coverage and other portable welfare measures for gig workers, ensuring that protections follow workers even as they switch between platforms.
A national registration database will enable seamless access to benefits and pave the way for long-term security mechanisms. For a sector characterised by fragmented employment and volatility, these protections represent an unprecedented step toward stability and dignity.
Prime Minister Narendra Modi described the new Labour Codes as a transformative step toward ensuring dignity, rights and social protection for workers across the formal, informal and gig sectors. Calling them a significant stride toward the vision of Viksit Bharat, he emphasised that the Codes strengthen the rights of every category of worker.
Union Labour Minister Mansukh Mandaviya echoed this sentiment, highlighting that gig and platform workers have been formally acknowledged within India’s labour architecture for the first time. He noted that the framework guarantees minimum wages, timely payments and safer workplaces across the board.
Several states, such as Gujarat, Maharashtra, Andhra Pradesh and Uttar Pradesh, which adopted similar reforms earlier through their own labour rationalisation efforts, offer a preview of the potential benefits at the national level. These states reported higher industrial investments, an increase in formal employment generation, faster approval systems, improved compliance and a rise in investor confidence. With the nationwide roll-out, many expect India to strengthen its competitiveness in global manufacturing and supply chains by offering consistent and predictable labour regulations across states.
The Codes arrive at a crucial moment when more than 80 percent of India’s workforce remains in the informal sector without access to basic protections. By establishing transparent wage structures, predictable labour rules, universal social security provisions and digitalised compliance systems, the new framework aims to bring millions into the formal economy.
This shift is particularly important as multinational firms increasingly look toward India as a manufacturing hub amidst shifting geopolitical supply chains. A more formalised and transparent labour market is seen as essential for attracting long-term global investments.
Despite the sweeping reforms, the road ahead is expected to present challenges. Successful implementation will require states to promptly notify rules, operationalise systems for gig worker registration, strengthen grievance redressal channels and undertake widespread awareness campaigns.
Notably, while the Codes lay a strong and progressive foundation, the real test lies in consistent enforcement and the ability of institutions to uphold worker rights in a rapidly changing economic environment.
Nonetheless, the introduction of the Labour Codes marks one of the most ambitious labour reforms in independent India’s history. By bridging gaps between formal and informal work, acknowledging the realities of the digital economy, and reinforcing safety, equity and dignity at the workplace, the new framework signals a decisive step toward shaping a more inclusive and future-ready labour economy.
Comments