FROM 29 LAWS TO 4 CODES: WHAT INDIA’S LABOUR REFORM MEANS FOR YOUR BUSINESS AND WORKFORCE.

WHAT IS FUNDAMENTALLY CHANGING

A unified registration, licensing and return mechanism reduces multiple, overlapping filings into a more centralised system, supported by digital interfaces and harmonised definitions (such as a common definition of “wages”). This lowers the compliance burden, especially for multi‑state and fast‑growing organisations, and introduces an “inspector‑cum‑facilitator” approach that emphasises guidance over purely punitive inspections.​​

Mandatory appointment letters for all workers formalise employment relationships and make job role, wages, benefits and conditions of work explicit. This significantly advances formalisation, improves access to social security and creates a documented employment history, particularly for blue‑collar, informal and migrant workers.​​

Statutory minimum wages and timely wage payment now apply across sectors and categories, backed by a national floor wage below which no state can set its minimum. A uniform wage definition (where basic plus dearness allowance must be at least 50% of total remuneration) may require employers to re‑design salary structures, potentially reducing take‑home pay but increasing retirement and social security contributions.​

SOCIAL SECURITY AND INCLUSION

The Social Security Code extends coverage to gig and platform workers, fixed‑term employees, contract workers and wider segments of the unorganised workforce. Aggregator platforms are required to contribute a defined share of turnover towards schemes for gig and platform workers, and Aadhaar‑linked identifiers are intended to make benefits portable across employers and states.​​

ESIC and EPF coverage are expanded pan‑India, with ESIC made mandatory even for a single worker in hazardous processes and voluntary for very small units. A dedicated social security fund and a re‑skilling fund (for retrenched workers, funded at 15 days’ last drawn wages per worker) further strengthen the safety net for vulnerable and transitioning workers.

Fixed‑term employees are placed on par with permanent workers for statutory benefits and become eligible for gratuity after one year of continuous service, rather than five. This supports flexible hiring models without pushing workers into insecure or under‑protected arrangements.​​

INDUSTRIAL RELATIONS, FLEXIBILITY AND SAFETY

Under the Industrial Relations Code, the threshold for prior government approval for lay‑offs, retrenchment and closure has increased from 100 to 300 workers, offering medium and large enterprises more flexibility in workforce planning. At the same time, a stronger dispute‑resolution architecture, two‑member Industrial Tribunals, grievance redressal committees and clearer strike/lockout rules aim to make conflict resolution faster and more predictable.​​

The Occupational Safety, Health and Working Conditions (OSHWC) Code harmonises safety and working‑condition standards, including free annual health check‑ups for workers aged 40+, national OSH standards and mandatory safety committees in larger establishments. Working hours are capped at 8–12 per day and 48 per week in high‑risk sectors, with overtime payable at double rates, while employers must ensure essential facilities such as clean drinking water, rest areas, canteens and creches where applicable.​​

Women are permitted to work in all roles, including night shifts, underground mining and hazardous occupations, subject to their consent and stringent safety protocols. Equal pay for equal work, an expanded family definition for women employees (including parents‑in‑law) and mandatory representation in grievance committees reinforce a more inclusive and gender‑responsive labour regime.​​

WHAT THIS MEANS FOR BUSINESSES

For businesses, the new Codes are not a cosmetic legal update; they demand a structural rethink of HR, payroll and compliance. Organisations will need to:

Early movers that treat this as a governance and people‑strategy transformation not just a legal obligation, will gain an advantage in talent attraction, industrial peace and regulatory confidence.​

HOW OBOX CAN HELP YOU LEAD, NOT JUST COMPLY

For employers, this is not just a legal change but an opportunity to redesign the people function around transparency, trust and long-term resilience. OBOX partners with organisations of all sizes, startups, SMEs and multinationals to turn the new labour codes into a competitive advantage rather than a compliance headache, by integrating policy, process and technology in a single, coherent framework.

Concretely, OBOX supports organisations to:

• Map your current HR, payroll and contractor practices to the new codes, identify gaps and prioritise actions in a clear roadmap tailored to your industry and scale.
• Redesign appointment letters, contracts, wage structures and HR policies to meet statutory requirements while staying aligned with your culture and talent strategy.
• Set up end‑to‑end compliance infrastructure registrations, returns, audits and documentation along with ongoing payroll support so that your leadership can focus on growth while staying confident about compliance.