New Labour Codes In India: The Government of India has introduced a major reform that will benefit lakhs of employees who frequently change jobs, including fixed-term employees, women, gig workers, MSME staff, and contract workers. Under the new Labour Codes, the minimum service required to receive gratuity has been reduced from five years to just one year. This means more workers will now be eligible for gratuity even if they don’t stay long in one organisation.

This major reform is part of the government’s plan to replace 29 old labour laws with four new Labour Codes. These include the Code on Wages, the Industrial Relations Code, the Social Security Code, and the Occupational Safety Code, replacing outdated regulations framed between the 1930s and 1950s. The goal is to make business processes smoother, improve worker welfare, update outdated rules, and create a more transparent and worker-friendly labour system.

Gratuity: What It Is And What Happens After Private Employee’s Death

It is a one-time amount that employers give to employees as a thank-you for their service. Under the Payment of Gratuity Act, private sector employees can receive gratuity when they leave a job (due to resignation or termination), retire, or become disabled. In case of an employee’s death, the amount is paid to their nominee. Earlier, employees had to complete at least five years of continuous service with the same employer to be eligible, except in situations of death or disability. (Also Read: What Is EPS-95 Scheme? If Employee Becomes Permanently Disabled, Will He Get Pension? Check Benefits, Eligibility Criteria, And How It Is Calculated)

New Labour Codes: How New Gratuity Rule Strengthens Worker Security?

With this reform, employees will not be penalised for having short job tenures, giving young workers who often switch jobs better financial security. It also benefits contractual, fixed-term, and gig workers by making gratuity easier to receive and more predictable. By offering gratuity to more people, the government is encouraging formal employment and improving the safety net for all workers. Overall, this change makes India’s workforce more secure and brings labour benefits closer to global standards.

New Labour Codes: Benefits Including Free Annual Health Check-Ups

For the first time, all workers, whether permanent, contractual, or fixed-term, must receive appointment letters, which improves job security and helps reduce disputes. The new Labour Codes also make preventive healthcare mandatory, requiring employers to provide yearly health checkups for workers aged 40 and above, helping with early detection and lowering long-term health risks.

Under the Code on Wages, every worker across all sectors is now entitled to minimum wages, ensuring that no one falls below a basic income level. Adding further, women are allowed to work in all types of jobs, including night shifts, giving them greater employment opportunities and flexibility.

New Delhi: Top global organisations such as the International Labour Organisation (ILO) and the International Social Security Association (ISSA) have welcomed India’s announcement to bring four Labour Codes into effect — recognising these reforms as a major step towards strengthening social protection, enhancing minimum wage frameworks and building institutional capacity, the government said on Saturday. 

The global bodies highlighted that India’s efforts contribute significantly to the wider international discourse on inclusive and modern labour systems.

Their remarks further underscore India’s growing leadership in shaping global labour and social security standards, according to a Labour Minister statement.

Gilbert F. Houngbo, Director-General of the International Labour Organization (ILO), stated in an X post that “Following with interest developments of India’s new Labour Codes announced today, including on social protection and minimum wages”.

“Social dialogue among govt, employers and workers will remain essential as reforms are implemented to ensure they’re positive for workers and business,” Houngbo mentioned.

The International Social Security Association (ISSA), in its post on social media platform X, said that India’s Labour Codes add momentum to global efforts for stronger, more inclusive social security systems.

“ISSA welcomes this milestone and encourages sustained investment in coverage, protection and institutional capacity,” it noted.

The ministry said that this reflects the positive international response to India’s Labour Codes, particularly in advancing fair wages, expanding social protection coverage and promoting greater formalisation of the workforce.

The four labour codes include the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020 and the Occupational Safety, Health and Working Conditions Code, 2020 with effect from November 21, 2025 — rationalising 29 existing labour laws. The implementation of the four Labour Codes addresses the long-pending need to move beyond colonial-era structures and align with modern global trends.

The Labour Ministry has reaffirmed its commitment to sustained collaboration with global institutions and domestic stakeholders to further strengthen India’s labour ecosystem and ensure effective implementation of the reforms.