Major Reforms Unleashed: Govt Notifies All 4 Labour Codes in India, Promising Social Security for Gig Workers & Gender Pay Parity

In a historic move reshaping India's employment landscape, the Government on Friday (November 21, 2025) officially notified all four Labour Codes. This notification ushers in major reforms, including extending universal social security coverage to gig workers, ensuring gender pay parity, expanding safety rights for women, providing statutory backing for minimum wages, and formally introducing fixed-term employment.

This decision consolidates 29 previously existing labour laws, some dating back to the 1930s into four simplified, modern codes designed to balance worker welfare with ease of doing business.

PM Modi: "A Strong Foundation for Viksit Bharat"

Following the notification, Prime Minister Narendra Modi took to social media to emphasize the government's commitment to the workforce.

Prime Minister Narendra Modi posted on X on Friday 21-11-2025:

"The new Labour Codes will lay a strong foundation for social security, minimum and timely wages, safe workplaces, and better opportunities for people, especially women and youth.

These changes will protect workers' rights and further strengthen India's economic growth. These reforms will increase employment, improve productivity, and accelerate our progress towards a Viksit Bharat (Developed India)."

The 5 Pillars of the New Notification

Friday's notification highlights five transformative shifts in the Indian job market:

• Universal Social Security: For the first time, the social security net is expanded to include gig and platform workers (like delivery partners and freelancers), ensuring they are no longer left vulnerable.
• Gender Pay Parity & Safety: The codes strictly mandate equal pay for equal work irrespective of gender and expand women's rights to work in all shifts (including night shifts) with mandatory safety protocols.
• Statutory Minimum Wage: A statutory floor wage has been introduced, ensuring that no worker in any sector falls below the poverty line due to underpayment.
• Fixed Term Employment: This creates a new category where contract workers receive the same benefits as permanent employees (including gratuity and leaves) for the duration of their work.
• Modernization: Replacing laws from the 1950s to fit the digital, remote, and dynamic work culture of 2025.

Detailed Impact: 10 Key Benefits for Employees

1. Faster Gratuity for Fixed-Term Staff: Fixed-term employees will now be eligible for Gratuity after just 1 year of service, replacing the old 5-year rule.
2. Timely Wage Payments: Strict timelines are set for wage settlements; delays are now legally punishable.
3. Double Wages for Overtime: Any work beyond the capped 48 hours/week will legally command double the wages.
4. Universal Appointment Letters: To formalize the economy, employers must issue formal Appointment Letters to every worker, increasing transparency.
5. Aggregator Contribution: Aggregators (e.g., ride-sharing apps) must contribute 1-2% of turnover to a welfare fund for gig workers.
6. Free Health Checkups: Mandatory free annual health checkups for workers in hazardous industries above a certain age/tenure.
7. Expanded ESI Coverage: The Employees' State Insurance (ESI) net now covers hazardous sectors and MSMEs previously excluded.
8. Media & Digital Coverage: Journalists and digital media personnel get formal protection regarding working hours and pay.
9. Migrant Worker Portability: Welfare benefits for migrant workers are now portable across state lines.
10. Workplace Safety Committees: Large establishments are mandated to form safety committees to monitor working conditions continuously.

Crucial Analysis: How Your Salary Will Change

The notification brings immediate changes to salary structures (CTC) due to the new definition of "Wages."

1. The "50% Rule"

Your Basic Salary must now be at least 50% of your total Cost to Company (CTC).

• Current Scenario: Companies often kept Basic Pay low (30-40%) to reduce PF liability.
• New Rule: Companies must increase Basic Pay and reduce Allowances (like HRA/Special Allowance) to comply.

2. Impact on Take-Home vs. Savings

• Lower In-Hand Salary: Since Provident Fund (PF) is 12% of Basic Pay, a higher Basic Pay means a higher PF deduction, reducing your monthly cash-in-hand.
• Higher Retirement Corpus: Conversely, your PF savings and Gratuity entitlement will increase significantly, securing your financial future.

Example: Salary Structure Change (For ₹50,000 CTC)

Component	Old Structure  (Basic @ 30%)	New Structure  (Basic @ 50%)	Result
Basic Salary	₹15,000	₹25,000	Increases
Allowances	₹35,000	₹25,000	Decreases
PF Deduction (12%)	- ₹1,800	- ₹3,000	Deduction Increases
Net Salary (In-Hand)	Higher	Lower	Less Cash Now
Retirement Corpus	Lower	Higher	More Savings Later

The notification of these four Labour Codes on November 21, 2025, marks the end of a decades-long wait for reform. While trade unions have expressed concerns over "employer-flexibility," the government maintains that these codes are the key to unlocking India's industrial potential while ensuring that every worker from the factory floor to the gig platform is legally protected.

Curated by Mit