India’s Labour Codes

November 27, 2025

Vidya Soundararajan, Associate Professor of Labor and Education at the Centre for Advanced Economics Research on Safety, Health and Working Conditions, recently analysed the impact of India’s new labor codes and described them as a long awaited step toward simplifying an overly complex legal framework. She noted that the National Commission on Labor had pointed out in 2002 that India’s labor laws were scattered across multiple statutes, creating confusion for both employers and workers. The government has now consolidated 29 laws into the Industrial Relations, Social Security and Occupational Safety, Health and Working Conditions Codes notified in 2020.

According to her, the simplification of definitions, digital compliance and streamlined procedures for registration and inspection reduce red tape and improve clarity, making operations smoother for manufacturing and service sector firms.

A major shift comes through the Wage Code, which introduces a statutory national minimum wage. Earlier, minimum wages acted only as guidelines for states and were limited to listed scheduled employments. Many sectors, including private security, courier services and care work, were often left out. The new framework extends the minimum wage to all sectors, strengthening income protection for a wide range of workers while giving employers greater certainty about labor costs. The Social Security Code brings nine earlier laws under one structure and expands coverage to unorganized, gig and platform workers. Fixed term employees are now eligible for proportionate gratuity and other benefits similar to permanent staff.